PPK GROUP LIMITED 07

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PROPERTY � INVESTMENTS � MANUFACTURING

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NOTIcE Of ANNUAL GENERAL MEETING

the 2007 Annual General Meeting of ppK Group limited will be held at:

3:00pm on Wednesday, 14 november 2007 at the Grace Hotel, 77 York Street, Sydney.

the business of the meeting is outlined in the notice of Meeting and proxy Form.

ASX look-up code: PPK

Website: www.ppkgroup.com.au

Share Registry: www.registries.com.au

ppK Group limited ABN 65 003 964 181

cONTENTs

Chairman and Managing Directors’ review 1

Review of operations 4

Board of Directors and Company Secretary 6

Five year financial summary 8

Corporate Governance Statement 9

Directors’ report 19

Financial statements 28

Corporate directory Inside back cover

FINANCIAL HIGHLIGHTS 2007 ($000)

profit from Continuing operations Before Income tax 6,099 220.5%

profit Before Income tax 16,760 462.6%

profit After tax Attributable to Members 10,111 135.6%

earnings per Share 15.9 cents 152.4%

Corporate Directory

DIREcTORs

colin f. Ryan B.Com., Dip.ed., C.A Director and Chairman (non-executive)

Glenn R. Molloy Director (executive)

Raymond M. Beath B.Com., F.C.A Director (non-executive)

Jury I. Wowk B.A., ll.B Director (non-executive)

David A. Hoff C.p.A Managing Director

cOMPANY sEcRETARY

Robert J. Nicholls MBA (Distinction), ll.B (Hons) Grad Dip leg prac., Grad Dip CSp, FCIS

HEAD OffIcE & REGIsTERED OffIcE ppK Group limited 25-27 Waratah Street Kirrawee nSW 2232 telephone 02 9521 8444 Facsimile 02 9521 4561 www.ppkgroup.com.au

sHARE REGIsTRY Registries limited level 2, 28 Margaret Street Sydney nSW 2000 telephone 02 9290 9600 Facsimile 02 9279 0664 www.registries.com.au

AUDITORs

BDO Kendalls Allianz Centre 2 Market Street Sydney nSW 2000 telephone 02 9286 5555 Facsimile 02 9286 5599

PPK GROUP PROPERTIEs

New south Wales

8 Contaplas Street Arndell park nSW 2148


13A Station Road Seven Hills nSW 2147

25-27 Waratah Street Kirrawee nSW 2232

16 Wiggs Road Riverwood nSW 2210

Victoria

36-42 Hydrive Close Remington Industrial estate Dandenong South VIC 3175

Queensland

72 pritchard Road Virginia QlD 4014

PPK Group Businesses

New south Wales Rambor pty limited 108 Albatross Road South nowra nSW 2541 telephone 02 4422 6323 Facsimile 02 4422 5423 www.rambor.com.au

DESIGN: COLLIER & ASSOCIATES THE STRATEGIC DESIGN COMPANY #12275

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PPK will continue to explore suitable investment opportunities which have the potential to add value for its shareholders.

chairman and managing director’s review

The financial year ended 30 June 2007 was a transitional one for PPK Group Limited (“PPK”) following completion of the sale of:

its traditional plastic packaging business on 1 September 2006; and

York Precision Plastics Pty Limited on 31 May 2007.

The sale of these businesses effect a departure by PPK from plastics manufacturing.

The reported profit before tax of $16.8 million consists of the following:

$10.3 million from the sale of the plastic packaging business;

$0.4 million from the discontinued operations of the plastic packaging business and York Precision Plastics; and

$6.1 million from continuing operations including property, Rambor and investments.

PPK has reported a profit after tax of $10.1 million equating to earnings of 15.9 cents per share.

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The Board has declared a:

final fully franked dividend of 3.25 cents thereby maintaining the yearly dividend of 6.5 cents fully franked; and

a special dividend of 5 cents fully franked, bringing the total dividends paid in respect of the 2007 financial year to 11.5 cents fully franked.

Future direction

On the completion of the sale of its plastic packaging business, PPK commenced a strategic review of its future direction with the fundamental objective of growing shareholder returns.

With a portfolio of leased properties in desirable geographical locations providing core stable earnings in the years ahead, PPK will focus on two key areas, namely the:

1. pursuit of suitable growth opportunities, in both domestic and overseas markets, for its retained manufacturing operation Rambor, which opportunities are expected to deliver improved earnings performance from this business; and

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Colin Ryan, Chairman (left) and David Hoff, Managing Director (right)

PPK has reported a profit after tax of $10.1 million

equating to earnings of 15.9 cents per share.

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Continuing Operations Discontinuing Operations

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2. identification of and investment in appropriate public and private companies in which there exists an opportunity for PPK to be actively involved in the management of these businesses utilising its core management expertise.

corporate governance

PPK continues its adherence to the company’s established corporate governance framework consistent with the ASX Principles of Good Corporate Governance and Best Practice Recommendations. Copies of the documents underlying this framework are publicly accessible on the company’s website at www.ppkgroup.com.au

In August 2007, the ASX Corporate Governance Council released the Corporate Governance Principles and Recommendations (“Revised Principles” & “Revised Recommendations”).

PPK intends transitioning to the Revised Principles in the next reporting period and will commence reporting by reference to the Revised Recommendations in the 2008 financial year.

our People

PPK’s people provide the company with the competitive advantage required to satisfy the needs of its customers, shareholders and other stakeholders.

The Board would like to record its appreciation of the way in which our employees have contributed to the performance of the company in the current and prior years, especially those employees who transferred with the completion of the sale of the plastic packaging business and York Precision Plastics.

PPK promotes the fostering of a supportive, family oriented and co-operative work place within a performance based environment where innovation, initiative and productivity are encouraged and rewarded.

Human resource policies, practices and procedures are designed to attract, engage and retain the highest calibre of employees.

commitment to oh & s

During this year, the company continued its strong commitment to the prevention of injuries and harm in the workplace with positive results achieved through the continued success of its comprehensive workplace health and safety systems and policies.

The year in review saw continuing focus and commitment to health and safety through a group wide commitment to maintaining the highest occupational health and safety standards for the benefit of its employees, contractors and visitors.

Information relating to occupational health and safety issues continues to be regularly considered by the Board which makes recommendations, where necessary, for the improvement in workplace systems and practices.

The company also has a comprehensive employment practices manual which confirms minimum standards of behaviour of employees, contractors, directors and officers while reinforcing the importance of compliance with applicable laws and regulations including those relating to occupational health and safety obligations.

Privacy

PPK has developed a Privacy Disclosure Statement consistent with the national Privacy Principles incorporated in prevailing privacy laws dealing with the collection, use, disclosure, security, access and accuracy of information available to it during the course of its business operations. The company has appointed a designated Privacy Officer to deal with queries regarding

the application of the policy. A copy of the PPK Privacy Disclosure Statement is detailed on the Company website at www.ppkgroup.com.au

the Business outlook

PPK has a stable core income base in the form of rent from long term leases generated by its property portfolio.

In addition, Rambor is exploring growth opportunities within its existing and new markets, both domestically and overseas, which is expected to yield future earnings growth and expansion potential.

Consistent with its strategic direction PPK has made a number of investments in public companies during the year including Industrea Limited (ASX Code: IDL), Allied Brands (ASX Code: ABQ), Cool or Cosy Limited (ASX Code: COS) and Frigrite Limited (ASX Code: FRR).

PPK also continues to hold its interest in prior investments in private companies, ezi Automation and Vend-Tech.

PPK will continue to explore suitable investment opportunities which have the potential to add value for its shareholders.

coLin ryan Chairman

david hoFF Managing Director

PPK will focus on the pursuit of sustainable growth initiatives for Rambor and the identification of appropriate investment opportunities

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PPK has made a number of strategic investments during the year in several public companies.

review oF oPerations

Property

PPK is the owner of an extensive portfolio of industrial properties including:

a property at Riverwood in Sydney which is leased to York Precision Plastics Pty Limited;

five (5) properties leased to the companies operating the plastics packaging businesses sold by PPK in September 2006 and located at Arndell Park, Kirrawee and Seven Hills in new South Wales, Virginia in Queensland

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and Dandenong in Victoria; and

two (2) vacant sites at Arndell Park and Virginia which are available for development and/or sale.

each of the PPK owned buildings are:

the subject of long term leases on commercial terms;

of modern construction; and

situated in desirable geographical locations.

One of the industrial properties located in Sydney will become available for development, lease and/or sale by PPK in the 2008 financial year.

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investments

PPK has made a number of strategic investments during the year in several public companies including:

1. industrea Limited (ASX CODe: IDL)

7,750,000 shares acquired at an average price of 14.7 cents per share compared with a share price at the time of reporting of 49 cents per share.

Industrea Limited is a major supplier to the mining industry in Australia

and overseas, both as an agent and a manufacturer.

2. allied Brands Limited (ASX CODe: ABL)


Allied Brands is the franchise owner in Australia of Baskin Robbins Ice-Cream, Cookie Man and Kenny’s Cardiology.

3. Frigrite Limited (ASX CODe: FRR)


PPK is now the largest single shareholder in Frigrite.

Frigrite is:

a fully owned and operated Australian company; and

a market leader in the field of climate control solutions (refrigeration and air conditioning) for both the food and beverage market and the general community.

It has annual revenues of approximately $140 million.

4. cool or cosy Limited (ASX CODe: COS)

6,000,000 shares acquired at 7 cents per share compared with a share price at the time of reporting of 9 cents per share.

Cool or Cosy is a leading supplier of air conditioning and installation products and services to the domestic, commercial and industrial markets.

manufacturing

Light Fittings and Thermoplastic Sheeting

York Precision Plastics (“YPP”) manufactures and distributes acrylic diffusers for the lighting industry and thermoplastic sheet for the building and signage industries in domestic and overseas markets.

During the year:

the cost of the plastic acrylic materials used in this business continued to increase in price both in raw materials purchased and finished product sourced from local and overseas suppliers;

despite an increase in overall sales and market share, margins were adversely affected by the inability to recover the full impact of the raw material price increases from customers in an increasingly competitive local market; and

it became increasingly evident that this business was unable to achieve an acceptable return on shareholders funds.

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Accordingly, after taking these and other relevant factors into account the PPK Board decided that a sale of the YPP business was appropriate.

PPK retained ownership of the industrial property at Riverwood following the sale process and has entered into a long term commercial lease with the new owners.

Mining equipment

Rambor is a leading designer and manufacturer of products for the underground coal mining industry. It manufactures a wide range of products including pneumatic and hydraulic roof bolters, rib drills, remote drilling rigs, grout mixers, pumps and water separators. The products are sold in Australia and exported around the world including Russia, Germany, uSA and Japan.

As reported last year, a major customer based in Germany and responsible for servicing the growing Russian market, ceased purchasing product from Rambor. Contrary to expectation, this continued into the first half of the current reporting period. Consequently, this situation contributed to a lower than anticipated profit performance by Rambor during the first half.

In January 2007, however, Rambor and its German-based customer entered into a new two (2) year exclusive supply contract which resulted in the immediate resumption of sales. This contributed to a significant improvement in the performance of the Rambor business in the second half of the financial year.

In addition, Rambor has implemented a number of strategic initiatives in the second half of the 2007 financial year.

examples of these initiatives include:

development and introduction to market of new products and services; and

entry by Rambor into new exclusive supply contract arrangements with overseas customers including a mining services company based in the united States.

While these projects have contributed to second half earnings the full impact of the initiatives is expected:

in the 2008 financial year; and

to yield an increase in overall profit contribution from Rambor in subsequent reporting periods.

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Rambor hand-held pneumatic roof bolter in operationPPK owned property – Dandenong South, VIC

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coLin ryan (70)

B.Com., Dip ed., CA Chairman & Independent Director Securities held: 500,000(1) Member of the Board since november 1995 and Chairman since March 1999. Member of the Audit Committee.

Background: Colin Ryan is an independent director of PPK Group Limited and has no business relationship with the company or its related bodies other than his directorship. Colin manages an investment and professional consultancy business providing a variety of professional management, financial and marketing services to various businesses. This follows experience as a Chartered Accountant and extensive service as an executive and non-executive director of various public companies. Colin has a Bachelor of Commerce degree from the university of new South Wales, a Diploma of education from Sydney university and is an Associate Member of the Institute of Chartered Accountants.

Other Listed Public Company Directorships†: York Group Limited, non-executive Director – Appointed: 25 January 2005. Ceased: 25 February 2005***

david hoFF (58)

C.P.A, Managing Director Securities held: 856,960(1) Member of the Board since november 2000.

Background: David Hoff joined the Company as Chief executive Officer in 1997 and was appointed its Managing Director in november 2000. Prior to his current appointment, David had several years experience in financial accounting positions within a multinational corporation in the mining industry followed by a position as Chief Financial Officer of a publicly listed Australian real estate development company. David has over 26 years experience in the packaging industry, in general management and managing director roles, gained with multinational corporations based in the united States of America, europe, and with a global packaging company in the Asia region.

Other Listed Public Company Directorships†: York Group Limited, Managing Director – Appointed: 25 January 2005. Ceased: 25 February 2005***

gLenn moLLoy (52)

executive Director Securities held: 8,747,270(1) Member of the PPK Group Limited Board since listing on 21 December 1994. Founder of the former entity Plaspak Pty Limited in 1979.

Background: Glenn Molloy founded the former entity Plaspak Pty Ltd in 1979 and

has acted as a director of the consolidated entity since that time. He has extensive experience on public company boards, and in advising publicly listed and private entities on commercial aspects of mergers, acquisitions and divestment activities. Glenn is also a development committee member of the “learning for life” programme conducted by the Smith Family Charity.

Other Listed Public Company Directorships: Homeleisure Limited, non-executive Director – Appointed: 22 January 2001. Ceased: 31 May 2006. Hudson Timber Products Limited, non-executive Director – Appointed: 2 December 2003, Ceased: 2 november 2004. York Group Limited, executive Director – Appointed: 25 January 2005. Ceased: 25 February 2005***

Relevant Associated Directorships: Corso Management Services Pty Limited*

JUry wowK (56)

BA., LLB, non-executive, Independent Director Securities held: 87,302(1) Member of the PPK Group Limited Board since listing on 21 December 1994.

Background: Jury Wowk is a Partner of Home Wilkinson Lowry and has provided legal services to the PPK Group since the establishment of Plaspak Pty Limited in 1979. From 1987 to 1989, Jury performed the role of Operations Manager at Plaspak Pty Ltd gaining valuable hands on practical experience in the management of the company’s operations. Jury has a Bachelor of Arts Degree and a Bachelor of Laws Degree from the university of Sydney. He is also a Law Society of new South Wales Accredited Specialist in Business Law and an Associate Member of the Australian Institute of Company Directors.

Other Listed Public Company Directorships†: Homeleisure Limited, non-executive Director – Appointed: 29 July 2002. Ceased: 16 April 2007 York Group Limited. Appointed: 1 February 2005. Ceased: 25 February 2005***

raymond Beath (57)

B.Com, F.C.A non-executive, Independent Director Securities held: 42,821(1) Member of the PPK Group Limited Board since listing on 21 December 1994. Chairman of the Audit Committee.

Background: Raymond Beath is a Director of Holden & Bolster Avenir Pty Limited, Chartered Accountants. He has a Bachelor of Commerce (Accounting) degree from the university of new South Wales and is a Fellow of the Institute of Chartered Accountants. Raymond has advised the consolidated entity on taxation, corporate and financial

management since 1984 and has been non-executive director of PPK Australia Pty Limited since 1986.

Other Listed Public Company Directorships†: York Group Limited. Appointed: 25 January 2005. Ceased: 25 February 2005***

Relevant Associated Directorships: Holden & Bolster Avenir Pty Limited*

roBert nichoLLs (38) COMPAnY SeCReTARYMBA (Distinction), LL.B (Hons), Grad Dip Leg Prac, Grad Dip CSP, FCIS Group General Counsel & Company Secretary Securities held: 70,625(1) Audit Committee Secretary.

Background: Robert is a practising solicitor and chartered company secretary. He performs the dual role of Group General Counsel & Company Secretary providing in-house legal and company secretarial services for the PPK Group of Companies. Prior to joining PPK in April 2000, Mr nicholls performed roles as a solicitor in private practice and with a Commonwealth regulatory body. Robert has a Masters of Business Administration (With Distinction) from Charles Sturt university, Bachelor of Laws (Honours) Degree from the university of Technology, Sydney, Graduate Diploma in Legal Practice and Graduate Diploma in Company Secretarial Practice. He is a Fellow of The Institute of Chartered Secretaries and Administrators and Chartered Secretaries Australia.

Relevant Associated Directorships: Vend-Tech Solutions Holdings Pty Limited** Vend-Tech Solutions (Australia & new Zealand) Pty Limited** Cool or Cosy Limited**

(1) Fully paid ordinary shares held directly or indirectly as at 24 September 2007.

* Refer to the Directors’ Report on page 26, and note 32 to the Financial Statements for a description of the involvement of each of these related entities.

** These are entities in which PPK hold an investment interest.

*** Cessation date refers to the date in which the entity ceased to be a listed public company.

† Held in the 3 years immediately before the end of the financial year ended 30 June 2007.

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consoLidated 2007 2006 2005 2004 2003

income statement $m

Sales revenue $000 34,112 98,408 89,572 73,817 84,120

Profit Before Income Tax $000 16,760 2,979 4,140 6,652 3,048

net profit attributable to members of PPK Group Limited

$000

10,111

4,292

3,153

6,909

2,081

Balance sheet

Total assets $000 63,473 123,693 129,602 90,700 93,100

net debt $000 9,184 58,235 58,895 29,525 32,737

equity attributable to members of PPK Group Limited $000 46,959 46,187 46,237 46,694 43,078

Total equity $000 46,959 46,338 47,190 46,845 43,229

share information

Dividends on ordinary shares $000 4,562 4,425 4,420 4,194 3,951

Dividends per ordinary share cents 11.5 6.5 6.5 6.5 6.0

Dividend payout ratio % 72.3 103.1 140.2 60.7 189.8

number of ordinary shares issued at year end 000 61,186 68,153 68,003 67,558 66,499

Market capitalisation $000 47,725 51,115 61,203 64,180 63,839

ratios and statistics

Return on equity attributable to members of PPK Group Limited

%

21.5

9.3

6.8

14.7

4.8

Basic earnings per share cents 15.9 6.3 4.6 10.3 3.2

net debt/equity % 19.6 126.0 124.8 63.0 75.7

Debt/(equity – Intangibles) % 19.9 139.9 140.7 66.4 80.4

Interest cover on continuing operations times 42.8 5.1 4.5 4.75 3.65

net Tangible Assets per Share cents 75.3 61.1 63.3 65.8 61.3

5 year financial summary

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PPK Group Limited (PPK) – Approach to Corporate Governance and Responsibility

the ppK Board of Directors is committed to the principles underpinning good corporate governance, applied in a manner which is most suited to ppK, and to best addressing the directors’ accountability to shareholders and other stakeholders. this is supported by an overriding organisation-wide commitment to the highest standards of legislative compliance and financial and ethical behaviour.

the Company continues to address directors’ accountability to stakeholders in a manner consistent with the Company’s individual circumstances enhanced through the introduction of publicly available policies and procedures which are designed to foster a culture of transparency in the way ppK is directed and managed.

As a measure of its stated commitment to good corporate governance principles, the Board will continue to:

review and continually improve its governance practices; and

monitor developments in good corporate governance.

Report on Compliance with the ASX Best Practice Recommendations

Currently, the ASX listing Rules require listed companies to include in their Annual Report a statement disclosing the extent to which they have followed the twenty eight (28) ASX Best practice Recommendations in the reporting period.

listed companies must identify the recommendations that have not been followed and provide reasons for the company’s decision. Where a recommendation has been followed for only part of the period the company must state the period during which it had been followed.

As detailed within this Statement of Corporate Governance practices, ppK considers its governance practices comply with each of the ten (10) core Corporate Governance principles and twenty five (25) of the ASX Best practice Recommendations.

For the reasons expressed within this Statement, ppK has elected not to adopt ASX Best practice Recommendations 2.4, 4.3 and �.2.

ppK has posted copies of its relevant corporate governance policies and practices to its website consistent with the ASX Best practice Recommendations.

ppK’s Statement of Corporate Governance practices, and copies of its policies, are available in the designated corporate governance area of its website at www.ppkgroup.com.au

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Transition to Revised Principles & Recommendations

In August 2007, the ASX Corporate Governance Council released the Corporate Governance principles and Recommendations (“Revised principles” & “Revised Recommendations”).

ppK intends transitioning to the Revised principles in the next reporting period and will commence reporting by reference to the Revised Recommendations in the 2008 financial year.

Date of this Statement

this statement outlines the:

ten (10) core principles, and twenty eight (28) Recommendations identified by the ASX as underlying good corporate governance; and

main corporate governance practices of ppK (formerly plaspak Group limited) during the year to 30 June 2007, except where stated otherwise.

ASX Principle 1: Lay solid foundations for management and oversight

ASX Recommendation 1.1: Formalise and disclose the functions reserved to the board and those delegated to management.

PPK: the Board has formalised its roles and responsibilities into a Charter. the Board Charter clearly defines the matters that are reserved for the Board and those that the Board has delegated to management.

In summary, the responsibilities of the ppK Board include:

oversight of the company, including its control and accountability systems;

setting the company’s major goals including the strategies and financial objectives to be implemented by management;

appointing, removing and controlling the Managing Director;

ratifying the appointment and, where appropriate, the removal of the chief financial officer and/or company secretary;

input into and final approval of management’s development of corporate strategy and performance objectives;

reviewing and ratifying systems of risk management and internal compliance and control, codes of conduct and legal compliance;

monitoring senior management’s performance and implementation of strategy, and ensuring that appropriate resources are available;

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Statement of Corporate Governance Practices for the year ended 30 June 2007


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approving and monitoring the progress of major capital expenditure, capital management, and acquisitions and divestitures;

approving and monitoring financial and other reporting; and

corporate governance.

the Board has delegated responsibility to the Managing Director for:

developing and implementing corporate strategies and making recommendations on significant corporate strategic initiatives;

maintaining an effective risk management framework and keeping the Board and market fully informed about material risks;

developing ppK’s annual budget, recommending it to the Board for approval and managing day-to-day operations within the budget;

managing day-to-day operations in accordance with standards for social and ethical practices which have been set by the Board;

making recommendations for the appointment of senior management, determining terms of appointment, evaluating performance, and developing and maintaining succession plans for senior management roles; and

approval of capital expenditure and business transactions within predetermined limits set by the Board.

ppK’s Board Charter is available in the corporate governance section of its website at www.ppkgroup.com.au

ASX Principle 2: Structure the board to add value.

ASX Recommendation 2.1: A majority of the board should be independent directors.

PPK: Independence.

A ppK director will be considered independent where he or she is:

independent of management, that is, a non-executive director; and

free from any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of his or her unfettered and independent judgement.

Materiality is assessed on a case by case basis by reference to the director’s individual circumstances rather than general materiality thresholds.

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the ppK Board has made its own assessment to determine the independence of each director on the Board. It is the Board’s view that each of the non-executive directors is independent.

the Board have established criteria for assessing independence of its directors and these can be found in the corporate governance section of the ppK website at www.ppkgroup.com.au

Composition of the Board

the ppK Board comprises three (3) non-executive directors and two (2) executive directors.

the composition of the Board is set based on the following factors:

the Company’s Constitution provides for the number of directors to be not less than three (3) and not more than ten (10) as determined by the directors from time to time;

the Board has adopted a policy that the position of Chairman will continue to be held by a non-executive director;

consistent with the Company’s objective that the Board should encompass a broad range of relevant expertise, the present Board consists of two directors with extensive property, investment and manufacturing experience, a practising Chartered Accountant, a practising Solicitor, and a Director who consults in financial and general management and who has wide experience as a member of other listed company boards.

ppK’s Constitution is available in the corporate governance area of its website at www.ppkgroup.com.au

there is no shareholding requirement imposed upon directors under the Company’s constitution. All of the ppK Board do, however, hold shares in the Company.

Details of all holdings by directors in the Company are detailed within the Directors’ Report.

ASX Recommendation 2.2: The chairperson should be an independent director.

the Chairman is selected by the Board from the non-executive directors.

the current chairman, Mr C F Ryan, is a non-executive, independent director appointed by the Board. He has been a director of ppK since november 1��5 and Chairman since March 1��.

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ASX Recommendation 2.3: The roles of chairperson and chief executive officer should not be exercised by the same individual.

PPK: ppK’s Chairman, Mr C F Ryan, and its Managing Director, Mr D A Hoff, have separate roles. the roles and responsibilities of the Chairman and the Managing Director are set out in the Board Charter which is available within the designated corporate governance area of the company website at www.ppkgroup.com.au

ASX Recommendation 2.4: The board should establish a nomination committee.

PPK: ppK has elected not to adopt this recommendation because it considers that its existing selection and appointment practices, detailed within this Statement, are an efficient means of meeting the needs of the company, particularly having regard to the fact that ppK is a relatively small publicly listed company by comparison to other listed entities which is reflected by the size of its operations, board structure and composition.

the ppK Board consists of only 5 members. It is considered that further division of the Board for the purposes of establishing a formal committee structure would not achieve enhanced efficiency or enable the Board to add greater value to this process.

the small size of the ppK Board, and the nature of its business, means that ppK has the present capacity to consider director competencies, selection and nomination practices in the context of duly constituted meetings of the Board and as a part of its self-evaluation processes.

ASX Recommendation 2.5: Provide the information included in the Guide to reporting on Principle 2

Skills, experience and expertise of each director.

term of office

the qualifications, experience and expertise of the directors, and the respective terms in the office held by individual directors, are set out on page 7 of this Annual Report.

names of Independent Directors

It is the Board’s view that each of the following non-executive directors is independent:

Mr C F Ryan

Mr J I Wowk

Mr R M Beath

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Independent professional Advice

ppK has in place a procedure whereby, after appropriate consultation, directors are entitled to seek independent professional advice, at the expense of ppK, to assist them to carry out their duties as directors. the policy of ppK provides that any such advice is made available to all directors.

procedure for Selection and Appointment of new Directors

the process for appointing a director within ppK is that, when a vacancy exists, the Board identifies candidates with the appropriate expertise and experience, using external consultants as appropriate. the most suitable candidate is appointed but must stand for election at the next annual general meeting following the appointment.

Consistent with the current law there is no retirement age for directors fixed by the Company’s Constitution.

the process for re-election of a director is in accordance with the Company’s Constitution, which requires that each year, at least one-third of the non-executive directors retire from office at the Annual General Meeting. the retiring directors may be eligible for re-election.

ASX Principle 3: Promote ethical and responsible decision-making.

ASX Recommendation 3.1: Establish a code of conduct to guide the directors, the chief executive officer (or equivalent), the chief financial officer (or equivalent) and any key executives as to:

3.1.1 the practices necessary to maintain confidence in the company’s integrity;

3.1.2 the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

PPK: ppK has developed a Code of Conduct for Directors and executives which is designed to ensure that:

high standards of corporate and individual behaviour are observed by all ppK directors and executives in the context of their respective roles and the performance of their duties with ppK;

directors and executives are aware of their responsibilities to ppK under the terms of their appointment or contract of employment; and

all of the stakeholders of the Company can be guided by the stated values and policies of ppK.

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In summary, the Code provides that directors, officers and executives must:

act honestly, in good faith and in the best interests of the company;

use due care, skill and diligence in the fulfilling their duties;

use the powers of their position for a proper purpose, in the interests of the company;

not make improper use of information acquired their position;

not allow personal interests, or those of associates, conflict with the interests of the company;

exercise independent judgement and actions;

maintain the confidentiality of company information acquired by virtue of their position;

not engage in conduct likely to bring discredit to the company;

comply at all times with both the spirit and the letter of the law, as well as, policies of the company.

Directors of the company may act in a professional capacity for the Company or its controlled entities, other than as auditor of the Company. these arrangements are subject to the restrictions of the Corporations Act 2001 (Cth).

Disclosure of related party transactions is set out in note 32 to the Financial Statements.

under the Constitution of the Company, and the Corporations Act 2001 (Cth), where the possibility of a conflict of interest exists and involves a director, directly or indirectly, the director must declare the fact, nature, character and extent of the conflict at the first meeting of Directors held after the relevant facts come to the director’s knowledge.

the director concerned does not receive copies of the relevant Board papers, if any, and withdraws from the Board meeting while such matters are considered by the remainder of the Board. Accordingly, the interested director takes no part in discussions nor exercises any influence over other members of the Board if a potential conflict of interest exists.

In addition, ppK has developed a series of policies designed to promote ethical and responsible decision making by directors, executives, employees and contractors of the Company, including:

trading policy;

Market Disclosure policy;

privacy policy;

occupational Health & Safety policy;

Code of Conduct and ethics (General);

Code of Conduct for Directors & executives.

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employees are actively encouraged to report activities or behaviour to senior management, the Company Secretary or the Board, which are a breach of the Code of Conduct and ethics, other ppK policies or regulatory requirements or laws.

ASX Recommendation 3.2: Disclose the policy concerning trading in company securities by directors, officers and employees.

PPK: Directors, officers and employees are subject to the Corporations Act 2001 (Cth) relative to restrictions applying for, acquiring and disposing of securities in, or other relevant products of, the Company (or procuring another person to do so), if they are in possession of inside information.

Inside information is that information which is not generally available, and which if generally available, a reasonable person would expect it to have a material effect on the price or value of the securities in the Company.

under the ppK trading policy, directors, officers and employees of the Company are restricted from trading in the Company’s securities during the period of one (1) month preceding the making of an announcement to the market by the Company relating to:

the Company’s Annual results;

the Company’s Half Year results;

the Chairman’s Address;

any other matter for which disclosure is required to be made by ppK under the listing Rules or Corporations Act.

In addition, all of the existing directors have entered into an agreement with the Company which requires on-going disclosure to the Company of any change in the director’s interests in securities, and in contracts relevant to securities, within three (3) business days of the change occurring.

new directors are required to enter into this form of agreement making initial disclosure of the interests. A director who ceases to hold office must provide a final form of disclosure of their interests at the date of ceasing to be a director.

the Company notifies the ASX of the changes on behalf of the director as required by the listing Rules.

ASX Recommendation 3.3: Provide the information indicated in Guide to reporting on Principle 3.

PPK: Copies of the ppK Code of Conduct for Directors and executives and trading policy are available at www.ppkgroup.com.au

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ASX Principle 4: Safeguard integrity of financial reporting.

ASX Recommendation 4.1: Require the chief executive officer (or equivalent) and the chief financial officer (or equivalent) to state in writing to the board that the company’s financial reports present a true and fair view, in all material respects, of the company’s financial condition and operational results and are in accordance with relevant accounting standards.

PPK: the ppK Board receive regular reports about the financial condition and operational results of ppK and its controlled entities.

the Managing Director and Group Financial Controller of ppK report in writing to the Board that the consolidated financial statements of ppK and its controlled entities for each subsequent half year and full financial year present a true and fair view, in all material respects, of the Group’s financial condition and operational results and are in accordance with accounting standards.

ASX Recommendation 4.2: The Board should establish an audit committee.

PPK: the ppK Board established an Audit Committee in 1��4 and continues to provide assistance to the Board in accordance with its established terms of Reference.

ASX Recommendation 4.3: Structure the audit committee so that it consists of:

only non-executive directors;

a majority of independent directors;

an independent chairperson, who is not chairperson of the board;

at least three (3) members.

PPK: ppK does not comply with the element relating to the desired number of members of the audit committee.

the ppK Audit Committee comprises only two (2) non-executive, independent directors and is chaired by Mr R M Beath who is not chairman of the Board.

the Board considers that the skills, qualifications and experience represented by the involvement of members Mr C F Ryan and Mr R M Beath are most suited to the effective discharge of the responsibilities of the committee.

ppK does not consider that any further value will be added by the inclusion of another member for the sake of satisfying this

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requirement, particularly given the small size and diversity of the ppK Board.

on 3 May 2005, the listing Rule which prescribed the composition of the audit committee for ASX 500 companies, including ppK, was amended so as to limit its application to the top 300 listed companies.

In keeping with this amendment, ppK has elected to maintain the existing composition of its audit committee

ASX Recommendation 4.4: The audit committee should have a formal charter.

PPK: the principal functions of the ppK audit committee are to:

review of the annual and half yearly financial reporting carried out by ppK;

review of the accounting policies of ppK;

review the scope and audit programmes of the internal and external auditors and any material issues arising from these audits;

oversee the independence of external auditors and determining procedures for the rotation of audit partners; and

report to the Board on the effectiveness of ppK’s systems of accounting and internal controls.

Reflecting the relative small size of the company, the full Board remain responsible for:

the sufficiency of, and compliance with, ethical guidelines and company policies affecting corporate governance, financial reporting and corporate control together with compliance with laws and external regulations;

identification of the full range of actual or potential risk exposures which are material to ppK; and

the effectiveness of the group’s risk management systems and strategies.


Details of the members of the Audit Committee

the Board’s Audit Committee consists of:

Mr R M Beath (Chairman)

Mr C F Ryan

the lead signing and review external audit partner attends committee meetings by standing invitation.

the qualifications of each member of the committee are set out on page 7 of the Annual Report.

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number of Meetings and names of Attendees

the number of meetings held during the reporting period and the attendees at these meetings is detailed within the Director’s Report.

Audit Committee Charter

the ppK Audit Committee Charter is available at www.ppkgroup.com.au

engagement & Rotation of external Auditor

the Audit Committee is responsible for nominating the external auditor to the Board for re-appointment. If the Audit Committee recommends a change in external auditor to the Board, the Board’s nomination of external auditor requires the approval of shareholders. the Audit Committee recommends to the Board the compensation of the external auditor.

the Audit Committee meets with the external auditor throughout the year to review the adequacy of the existing external audit arrangements with particular emphasis on the scope, quality and independence of the audit.

It has been determined by the Audit Committee that the external auditor will not provide services to the company where the auditor would:

have a mutual or conflicting interest with the company;

be in a position where they audit their own work;

function as management of the Company; or

have their independence impaired or perceived to be impaired in any way.

Specifically, the external auditor will not normally provide the following types of services to the Company:

bookkeeping or other services relating to the accounting records or financial statements of the Group;

financial information or information technology systems design and implementation;

appraisal and valuation services, fairness opinions or contributions-in-kind reports;

actuarial services;

internal audit outsourcing services;

management functions, including temporary staff assignments or human resource services, including recruitment of senior management;

broker or dealer services, investment advisor, corporate finance or investment banking services; and

legal and litigation support services.

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procedures are in place governing approval of any non-audit work before the commencement of any engagement.

BDo Kendalls have been the appointed independent external auditors of ppK since listing as the former entity plaspak Group limited in 1��4 and continue to act in this role for the consolidated entity.

the Board has elected to adopt a policy which is consistent with the primary and secondary rotation obligations regarding auditors such that:

the lead or review audit partner’s responsibilities may not be performed by the same person for longer than five (5) successive years (“primary rotation obligation”); and

the lead or review audit partner’s responsibilities may not be performed by the same person for more than five (5) out of seven (7) successive years (“secondary rotation obligation).

In addition, the Board requires a minimum of two (2) consecutive years “cooling off” period before an auditor undergoing rotation can return to playing a significant role in the audit of the Company.

During the reporting period, the lead audit partner for ppK was Mr Wayne Basford.

Mr Basford replaced , by rotation, Mr Kevin Reid as lead audit partner for the Company in respect of the financial year commencing 1 July 2006.

ASX Principle 5: Make timely and balanced disclosure.

ASX Recommendation 5.1: Establish written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior management level for that compliance.

PPK: the ppK Board is committed to keeping its shareholders, and the market, fully informed of major developments having an impact on the Company.

Comprehensive procedures are in place to identify matters that are likely to have a material affect on the price, or value, of the ppK securities and to ensure those matters are notified to the ASX in accordance with the listing Rule disclosure requirements.

Senior management and the Board are responsible for scrutinising events and information to determine whether the disclosure of the information is required in order to maintain the market integrity of the Company’s shares listed on the ASX.

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the Company Secretary is responsible for all communications with the ASX.


Compliance with listing Rule Disclosure Requirements.

the procedures relating to the notification of price sensitive information to the ASX and the subsequent posting of announcements on the ppK website are detailed within the ppK Market Disclosure policy available at www.ppkgroup.com.au

ASX Principle 6: Respect the rights of shareholders.

ASX Recommendation 6.1: Design and disclose a communications strategy to promote effective communication with shareholders and encourage effective participation at general meetings.

PPK: ppK recognises the right of shareholders to be informed of matters, in addition to those prescribed by law, which affect their investments in the Company.

the ppK Shareholder Communication policy, available at www.ppkgroup.com.au, demonstrates ppK’s commitment to:

dealing fairly, transparently and openly with both current and prospective shareholders;

the use of available channels and cost effective technologies to reach shareholders who may be geographically dispersed and in order to communicate promptly with all shareholders; and

facilitating participation in shareholders meetings and dealing promptly with shareholder enquiries.

ppK communicates information to shareholders through:

the annual report;

disclosures to the ASX and ASIC;

notices and explanatory memoranda of annual general meetings and general meetings;

occasional letters from the Managing Director and Chairman to inform shareholders of key matters of interest; and

the Company’s website on the internet at: www.ppkgroup.com.au

the Board encourages active participation by shareholders at the Annual General Meetings, or other General Meetings, to ensure a high level of accountability and understanding of ppK’s strategy, performance and goals.

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Consistent with best practice, important issues are presented to shareholders as single resolutions expressed in plain, unambiguous language. proceedings are held in a locality, and at a readily accessible venue, conducive to maximising the number of shareholders present, and able to participate, at the meeting. Shareholders are provided with opportunities of asking the Board questions regarding the management of the Company.

ASX Recommendation 6.2: Request the external auditor to attend the annual general meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the auditor’s report.

PPK: ppK ensures that the lead external audit partner, or representative, attends the Annual General Meeting, or other general meetings, of the Company and that shareholders are afforded the opportunity of asking the auditor questions regarding the conduct of the audit, the content of the audit report or any issues arising from the audit or preparation of the report.

ASX Principle 7: Recognise and manage risk

ASX Recommendation 7.1: The board or appropriate board committee should establish policies on risk oversight and management.

PPK: the Board of ppK recognise that effective management of risk is an integral part of good management and vital to the continued growth and success of the ppK Group of Companies.

the ppK Board is responsible for the oversight of the group’s risk management and control framework.

the Board has implemented a policy framework designed to ensure that the group’s risks are identified, analysed, evaluated, monitored, and communicated within the organisation on an on-going basis, and that adequate controls are in place and functioning effectively.

this risk management and control policy framework incorporates the maintenance of appropriate policies, procedures and guidelines which address ppK’s unique operating environment and is utilised by the Board as a means of identifying opportunities and avoiding or mitigating losses in the context of ppK’s businesses.

the Board oversees management’s risk management and control processes including the development of risk profiles as a part of the overall business and strategic planning process.

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of avoidance or mitigation measures within the group and may delegate control of these risks to the appropriate level of management at each site.

the Board regularly monitors the operational and financial performance of the Company and the economic entity against budget and other key performance measures. the Board also receives and reviews advice on areas of operational and financial risk and develops strategies, in conjunction with management, to mitigate those risks.

each month, a report is presented to the Board by the Managing Director. the reports encompass matters including actual sales, costs and profitability against budgeted forecasts, work place safety, compliance with tax and superannuation legislation and environmental conformance. Reports are prepared and submitted on a monthly basis by the Group Financial Controller in relation to the overall financial position of the Group. the Board is regularly briefed by the Managing Director and senior management on market and operational factors which may impact on the performance of the Group.

ASX Recommendation 7.2: The chief executive officer (or equivalent) and the chief financial officer (or equivalent) should state to the board in writing that:

7.2.1 the statement given in accordance with best practice recommendation 4.1 (the integrity of financial statements) is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the board;

7.2.2 the company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects.

PPK: the Managing Director and Group Financial Controller of ppK report in writing to the Board that:

the statement given in accordance with best practice recommendation 4.1 (the integrity of financial statements) is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the board;

the company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects.

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PPK: ppK has made a description of its risk management policy and internal compliance and control system publicly available and posted it to its website in the designated corporate governance area at www.ppkgroup.com.au

ASX Principle 8 Encourage Enhanced Performance

ASX Recommendation 8.1 Disclose the process for performance evaluation of the board, its committees and individual directors, and key executives.

PPK: the Board has adopted an on-going, self-evaluation process to measure its own performance and the performance of its committee during the reporting period.

the Chairman meets periodically with individual directors to discuss the performance of the Board and the director. In addition, an evaluation is undertaken by the Chairman of the contribution of directors retiring by rotation prior to the Board endorsing their candidature.

the review process involves consideration of the all of the Board’s key areas of responsibility and accountability and is based on an amalgamation of factors including capability, skill levels, understanding of industry complexities, risks and challenges, and value adding contribution to the overall management of the business.

the outcomes of the self-assessment program are used to enhance the effectiveness of individual directors and the Board collectively.

the performance of key executives is monitored by means of scrutiny by the Board of regular monthly reports provided by management regarding the group financial performance and forecasted results, presentations and operational reports, and the achievement of predetermined performance objectives.

enhanced effectiveness of the Board and management is also addressed through:

Board Meetings

the frequency of Board meetings and director’s attendance at those meetings is detailed within the Directors’ Report. Directors are expected to prepare for meetings in a manner which will enable them to attend and participate at the meeting.

Directors are also required to make on-site visits and attend workshops as required.


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Board papers & Agendas

Board agendas are structured throughout the year in order to ensure that each of the significant responsibilities of the Board is addressed.

Directors receive board packs prior to each meeting which detail financial, operational and strategy reports from senior management who are available to discuss reports with the Board.

Access to information.

All directors have access to company records and information, and receive regular detailed financial and operational reports from senior management.

the Company Secretary is available to all Directors and may be consulted on on-going issues of corporate governance, the ppK Constitution and the law. In addition, the Chairman and other independent non-executive directors regularly consult with the Managing Director and Financial Controller, and may confer and request additional information from any ppK employee. Management are available to discuss reports, and any issue arising, with the Board as required.

the Board collectively, each Board Committee and each individual Director has the right, following appropriate consultation, to seek independent professional advice at ppK’s expense to help them carry out their responsibilities.

A copy of the process for performance evaluation of the board, its committees and individual directors, and key executives is available in the designated area for corporate governance on the Company website at www.ppkgroup.com.au

ASX Principle 9: Remunerate fairly and responsibly

ASX Recommendation 9.1: Provide disclosure in relation to the company’s remuneration policies to enable investors to understand (i) the costs and benefits of those policies and (ii) the link between remuneration paid to directors and key executives and corporate performance.

PPK: the broad remuneration policy objective of ppK is to ensure that the emoluments provided properly reflect the person’s duties and responsibilities and is designed to attract, retain and motivate executives of the highest quality and standard to enable the organisation to succeed.

ppK is committed to making timely disclosure of all relevant information relating to its remuneration practices and policies in the context of its reporting obligations in the corporate

governance statement, in its annual report, and pursuant to continuous disclosure requirements.

the Company’s policies relating to the remuneration of Directors, officers and Senior executives and the level of their remuneration are set out in the Directors’ Report on pages 22 to 25 of the Annual Report and notes 5 and 32 to the Financial Statements.

ASX Recommendation 9.2: The board should establish a remuneration committee.

PPK: ppK has elected not to adopt this recommendation because it considers that its existing remuneration practices, detailed within this Statement, are an efficient means of meeting the needs of the company, particularly having regard to the fact that ppK is a relatively small publicly listed company by comparison to other listed entities which is reflected by the size of its operations, board and management structure and composition.

the ppK Board consists of only 5 members. It is considered that further division of the Board for the purposes of establishing a formal remuneration committee structure would not achieve enhanced efficiency or enable the Board to add greater value to this process.

the small size of the ppK Board, the nature of its business and its management structure, means that ppK has the present capacity to giving due consideration to the overall remuneration policies and strategies of the company during the conduct of its regular board meetings and by appropriate recourse to relevant market data and, where applicable, to external executive remuneration consultants.

ASX Recommendation 9.3: Clearly distinguish the structure of non-executive directors’ remuneration from that of executives.

PPK: the aggregate remuneration of non-executive directors is approved by shareholders.

Individual directors’ remuneration is determined by the board within the approved aggregate total (currently up to a maximum of $275,000 per year as determined at the 2003 Annual General Meeting).

In determining the appropriate level of director’s fees, data from surveys undertaken of other public companies similar in size or market section to ppK is taken into account.

non-executive directors are not entitled to participate in performance based remuneration practices unless approved by shareholders.


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non-executive directors of ppK are remunerated by means of the payment of cash benefits. ppK does not currently have in place a retirement benefit scheme or allowance for its non-executive directors.

executive directors do not receive directors’ fees.

A review of the compensation arrangements for the Managing Director and Senior executives is conducted by the full Board at a duly constituted Directors’ Meeting. the review is performed annually and is based on criteria which includes the individual’s performance, market rates paid for similar positions and the results of the Company during the relevant period.

ASX Recommendation 9.4: Ensure the payment of equity based executive remuneration is made in accordance with thresholds set in plans approved by shareholders.

PPK: the ppK executive Incentive Scheme (peIS) has been approved by shareholders and provides the Board with the discretion to grant options and provide loans to eligible executives for the purpose of acquiring Scheme Shares.

the Board ensures that the payment of equity-based executive remuneration is made in accordance with thresholds established by the peIS and exercises its discretion under the Scheme in a manner consistent with the broad remuneration policy objectives of the Company.


PPK: A copy of the ppK Remuneration policy, and a summary of the peIS, has been made publicly available in the designated corporate governance area of its website at www.ppkgroup.com.au

ASX Principle 10: Recognise the legitimate interests of stakeholders.

ASX Recommendation 10.1: Establish and disclose a code of conduct to guide compliance with legal and other obligations to legitimate stakeholders.

ppK is committed to the operation of its business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of the company and the industry in which it operates.

the Board has approved a Code of Conduct and ethics (“Code”) which applies to all directors, executives, management and employees without exception.

In addition, the conduct of directors and executives is also governed by Code of Conduct for Directors and executives formulated in response to ASX Recommendation 3.1.

Copies of the Code and Code of Conduct for Directors and executives are available within the designated corporate governance area of the company website at www.ppkgroup.com.au

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Your directors present their report on the parent entity and its subsidiaries for the financial year ended 30 June, 2007.

DIRECTORS

the names of directors in office at any time during or since the financial year are:

Colin Francis Ryan – non-executive Chairman

David Alfred Hoff – Managing Director

Glenn Robert Molloy – executive Director

Raymond Michael Beath – non-executive Director

Jury Ivan Wowk – non-executive Director

Details of the directors’ qualifications, experience, responsibilities and interests in shares and options of the company, together with details of other directorships of other listed public companies in the preceding three (3) years, are included on page 7 of the Annual Report.

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

COMPANY SECRETARY

the Company Secretary in office at the end of the financial year was Mr Robert nicholls.

Details of the qualifications and experience of the Company Secretary are included on page 7 of the Annual Report.

PRINCIPAL ACTIVITIES

the principal activities of the consolidated entity during the financial year were the:

manufacture and marketing of plastic products including bottles, jars, containers and closures;

importation and wholesale of trigger sprays products;

importation and distribution of plastic lighting and industrial products;

manufacture and distribution of extruded plastic products;

investment in publicly listed and privately held businesses;

property ownership and management; and

design, manufacture and distribution of portable underground mining equipment.

the consolidated entity ceased to be involved in the:

manufacture and marketing of plastic products including bottles, jars, containers and closures; and

importation and wholesale of trigger sprays products,

as a result of the sale of its plastics packaging business which completed on 1 September 2006; and

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importation and distribution of plastic lighting and industrial products; and

manufacture and distribution of extruded plastic products,

following the sale of York precision plastics pty limited on 31 May 2007.

there were no other significant changes in the nature of the consolidated entity’s principal activities during the financial year.

OPERATING RESULTS

the consolidated profit after tax of the consolidated entity for the period ended 30 June 2007 amounted to $10,111,000.

DIVIDENDS PAID OR RECOMMENDED

Dividends paid or recommended for payment are as follows:

Dividend of $0.0375 per share paid in october, 2006 $2,555,742

Interim dividend of $0.0325 per share paid in April, 2007. $2,004,084

Final ordinary dividend of $0.0325 per share paid in September, 2007. $1,�72,372

Special dividend of $0.05 per share paid in September, 2007 $3,034,418

REVIEW OF OPERATIONS

Information on the entity’s operations, financial position, business strategies and prospects for the future is contained within the Chairman and Managing Director’s overview and the Review of operations included in the Annual Report accompanying these Financial Statements.

FINANCIAL POSITION

the net assets of the consolidated entity have increased by $621,000 from 30 June 2006.

the main changes in the financial position have resulted from the:

disposal of the plastics packaging business;

sale of York precision plastics pty limited; and

on-market buy-back of 6,�66,878 shares at a cost of $5,312,000.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Completion of the Sale of plastics packaging Business

the Company proceeded to completion of the sale of the plastics packaging business, and with a name change to ppK Group

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Directors’ Reportfor the year ended 30 June 2007

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limited, on 1 September 2006, following satisfaction of relevant conditions precedent including shareholder approval which was obtained at a General Meeting on 16 August 2006.

the plastics packaging business was sold for $50 million less lease and hire purchase liabilities of $7.5 million assumed by the purchaser at completion. Additional payments totalling $5 million were paid to the Company by the purchaser during the reporting period upon fulfilment by ppK of agreed performance criteria following completion of the sale.

In conjunction with the sale of the business, the purchaser entered into long term leases for 5 of the properties owned by ppK. Additionally, the purchaser leased for a 12 month period the property at Seven Hills occupied by plaspak JWS pty limited. this property will become available in late 2007 for lease, redevelopment and/or sale.

on-Market Buy-Back Scheme

During the reporting period, the Company had in place an on-market buy-back scheme comprising the on-market buy back of up to:

10% of the issued capital of the Company (or 6,815,310 shares) announced to the market on 1� September 2007 (“Initial Buy-Back”); and

25% of the issued capital of the Company (or 17,038,276 shares) inclusive of any shares acquired under the Initial Buy Back which was announced to the market on 1� September 2006 (“Subsequent Buy-Back”) and approved by shareholders at a general meeting convened on 21 november 2006.

on 1� June 2007, the Company completed its Initial Buy-Back at a cost of $5,188,377 (or an average price of $0.76 cents per share).

As at the date of this report, the Company has acquired:

an additional 1�6,5�8 shares under the Subsequent Buy-Back at a cost of $156,785;

a total of 7,464,737 shares under the Initial Buy-Back and Subsequent Buy-Back at a combined cost of $5,345,162.

the Subsequent Buy-Back will end on or before 21 november 2007.

Completion of the Sale of York precision plastics pty limited (“Ypp”)

on 2� June 2007, contracts were exchanged and the sale of Ypp completed for $�.25 million.

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the sale price equated to the net assets of Ypp which was purchased in a leveraged management buy out.

ppK has retained the property from which Ypp operates in Riverwood, Sydney and has entered into a 3 year lease with the new owners on commercial terms.

the sale of Ypp effects a departure by ppK from plastics manufacturing.

Investments

ppK has made a number of strategic investments during the year in several public companies including:

Industrea limited (ASX Code: IDl);

Allied Brands limited (ASX Code: ABQ);

Frigrite limited (ASX Code: FRR); and

Cool or Cosy limited (ASX Code: CoS).

Information regarding these investments is detailed within the Accounts and Review of operations section of the Annual Report.

AFTER BALANCE DATE EVENTS

no matter or circumstance has arisen since the end of the financial year which is not otherwise dealt with in this report or in the Consolidated Financial Statements that has significantly affected or may significantly affect the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in subsequent financial years.

FUTURE DEVELOPMENTS

the likely developments in the operations of the consolidated entity and the expected results of those operations in financial years subsequent to the year ended 30 June 2007 are included in detail in the Chairman and Managing Director’s Review and Review of operations section of the Annual Report.

ppK has a portfolio of leased properties in desirable geographical locations which will provide stable earnings in the 2008 year and future years.

In addition, the Company will focus on:

maximising the return on the retained manufacturing business, Rambor, through strategic expansion and new product development initiatives and;

the identification of suitable strategic investments which provide prospects for sustainable growth and the opportunity for active investor and management participation by ppK.

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ENVIRONMENTAL ISSUES

As a consequence of the sale of its plastic packaging business, ppK will no longer be involved in the environmental process initiatives introduced by the national packaging Covenant.

the Company will nonetheless remain committed to:

the effective management of environmental issues having the potential to impact on its remaining business; and

minimising the consumption of resources utilised by its operations.

ppK has otherwise complied with all government legislation and regulations with respect to disposal of waste and other materials and has not received any notices of breach of environmental laws regulations.

the Group’s approach to environmental sustainability is outlined in its environmental policy at www.ppkgroup.com.au

PROCEEDINGS ON BEHALF OF COMPANY

no person has applied for leave of the Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings.

the company was not a party to any such proceedings during the year.

REMUNERATION REPORT

this report details the nature and amount of remuneration of each Director of the Company, the Secretary of the Company and for each of the five (5) named Relevant Group executives (as that term is defined in the Corporations Act 2001) of the consolidated entity receiving the highest remuneration for the year ended 30 June 2007.

Remuneration Policy

the remuneration policy of the Company has been designed to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific short-term incentives based on key performance areas affecting the consolidated entity’s financial results.

the ppK Board believes the remuneration policy to be appropriate and effective in its ability to attract, retain and motivate directors and executives of the highest quality and standard to manage the affairs of the consolidated entity, as well as, create goal congruence between directors, executives and shareholders.

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the remuneration policy, setting the terms and conditions for directors, executives and management was developed by the Board. the policy for determining the nature and amount of remuneration for board members and senior executives of the consolidated entity is as follows:

Remuneration of non-executive directors is determined by the Board from the maximum amount available for distribution to the non-executive directors as approved by shareholders. Currently this amount is set at $275,000 per annum in aggregate as approved by shareholders at the 2003 Annual General Meeting.

In determining the appropriate level of directors’ fees, data from surveys undertaken of other public companies similar in size or market section to the Company is taken into account.

non-executive directors are remunerated by means of cash benefits. they are not entitled to participate in performance based remuneration practices unless approved by shareholders. the Company will not generally use options as a means of remuneration for non-executive directors and will continue to remunerate those directors by means of cash benefits.

ppK does not provide retirement benefits for its non-executive directors.

executive directors do not receive director’s fees.

the Board of Directors is responsible for approving remuneration policies and packages applicable to senior executives of the company. the broad remuneration policy is to ensure that the remuneration package properly reflects the person’s duties and responsibilities and that the remuneration is competitive in attracting, retaining and motivating people of the highest quality and standard.

A review of the compensation arrangements for executive directors and senior executives is conducted by the full Board at a duly constituted Directors meeting.

the Board conducts its review annually based on established criteria which includes:

the individual’s performance;

reference to market data for broadly comparable positions or skill sets in similar organisations or industry;

the Company’s performance during the relevant period; and

the broad remuneration policy of the consolidated entity.

Senior executives and executive directors may receive bonuses based on the achievement of specific goals of the consolidated entity.

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An executive incentive scheme approved by shareholders is in place, which provides the board with the discretion to grant options and provide loans to eligible executives for the purpose of acquiring Scheme Shares. A summary of the terms and conditions of the scheme may be found in the designated area for corporate governance on the Company website at www.ppkgroup.com.au

the Board exercises its discretion under the ppK executive Incentive Scheme in a manner consistent with the broad remuneration policy objectives of the consolidated entity. the grant of options to executives is linked to significant performance hurdles including the exercise price of the options being subject to material improvement in company performance (measured by its share price) during a restricted exercise period.

Company Performance, Shareholder Wealth and Directors and Executives Remuneration

the Remuneration policy has been designed to achieve the goal congruence between shareholders, directors and executives.

the two methods employed in achieving this aim are:

a performance based bonus for executives based on key performance indicators (KpI’s) which include a combination of short-term financial and non-financial indicators; and

the issue of options to executives as a means of long-term incentive to encourage the alignment of personal and shareholder interests.

the measures are chosen as they directly align the individual’s reward to the KpI’s of the consolidated entity and to its strategy and performance.

the company believes this policy to have been effective in increasing shareholder wealth and in retaining quality employees committed to the long term objectives of the Company.

eligible executives may be entitled to receive incentive payments of between 10% and up to 15% of their base salary during each full year of employment in which they achieve satisfactory levels of productivity, goals and targets pre-determined in consultation with the Board and Managing Director.

A significant proportion of eligible bonus payments to a Company executive and or relevant group executive (as these terms are defined in the Corporations Act) is linked to the earnings of either the:

consolidated entity; or

individual company in which the relevant executive performs his or her primary duties and responsibilities.

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Advanced Fluid Systems pty limited, an entity related to p.R.Mastalir, Managing Director of Rambor pty limited (“Rambor”) and King Cobra Mining equipment pty limited (“King Cobra”), was paid a bonus payment which vested during the 2006 year relating to the satisfaction of performance targets in respect of the company earnings of Rambor and King Cobra for the 2005 financial year.

no other bonus payments have been made to the Managing Director, company executives or relevant group executives of the consolidated entity in respect of objectives relating to the company’s earnings during the year or in respect of the preceding four (4) years.

the remaining proportion of eligible bonus payments relate to non-financial performance measures which may include, for example, people, safety, strategy and risk measures having overall benefits for the consolidated entity. Details of bonuses paid to executives in respect of the attainment of predetermined non-financial performance indicators are detailed within this report and in note 5 to the Accounts accompanying this report.

Details of Remuneration for the year ended 30 June 2007

Directors’ and executive officers’ remuneration

Details of the nature and amount of each major element of compensation of each director and secretary of the Company and each of the five named Company executives and relevant group executives who receive the highest remuneration for the year ended 30 June 2007 are included in the table on the following page of his report.

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Short term incentives Post Long term incentives employment Salary and Short term Other Super benefits Long Termination Share based Total Proportion of fees incentive service benefits payments remuneration cash bonus leave performance related ($) ($) ($) ($) ($) ($) ($) (%)

Directors Non-ExecutiveC.F. Ryan 72,000 – – – – – 72,000 –

R.M. Beath 48,000 – – – – – 48,000 –

J.I. Wowk 48,000 – – – – – 48,000 –

ExecutiveG.R. Molloy 259,500 – – 28,050 – – 287,550 –

D.A. Hoff 216,333 125,000** 36,043 85,230 4,651 84,000 – 551,257 22.7

Total Directors 1,006,807

SecretaryR.J.Nicholls 152,234 51,950** 6,834 12,909 2,249 – – 226,176 22.9

Total Secretary 226,176

Relevant Group ExecutivesF.J. Hardiman 152,368 37,500*** 18,791 12,186 4,048 179,706 – 404,599 9.3

P.R. Mastalir 103,058 – 45,000 11,250 6,038 – – 165,346 –

R.J. Nicholls 152,234 51,950** 6,834 12,909 2,249 – – 226,176 22.9

G. Rufford* 104,867 – 17,747 12,584 2,299 – – 137,497 –

C.J. Salmon* 164,244 10,000 18,068 19,709 3,679 – – 215,700 4.6

Total Relevant Group Executives 1,149,318

* Remuneration information for these Relevant Group Executives relates to the 11 month period ended 31 May 2007 after which the nominated employees ceased to be Relevant Group Executives.

** These figures include bonus payments made to the identified executives in respect of:

(a) established performance criteria applied during the 2006 financial year relating to the satisfactory completion of the sale of the plastics packaging business which subsequently took place on 1 September 2006; and

(b) the fulfilment of pre-determined performance objectives and earnings targets in the 2007 financial year.

*** See Note 5 to the Financial Statements for further detail regarding this payment.

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the five named relevant group executives held the following positions during the period:

Relevant Group Executive Position

F J Hardiman Chief Financial Officer

P R Mastalir Managing Director – Rambor Pty Limited

R J Nicholls Group General Counsel & Company Secretary

G Rufford* Financial Controller – York Precision Plastics Pty Ltd

C J Salmon* Managing Director – York Precision Plastics Pty Limited

* Remuneration information for these Relevant Group Executives relates to the 11 month period ended 31 May 2007 after which the nominated employees ceased to be Relevant Group Executives.

Performance Income as a Proportion of Total Remuneration

performance based bonuses are based on set monetary figures and not on proportions of salary. this has resulted in the proportions of remuneration related to performance varying between individuals. the Board has set these bonuses to encourage achievement of specific goals that have been given a high level of importance in relation to growth and profitability of the consolidated entity.

Analysis of bonuses included in remuneration

the vesting profile of the short-term incentive cash bonus awarded as compensation to each director and secretary of the Company and each of the five named Company executives and relevant group executives are detailed below:

Short term incentive cash bonus Included in Vested Forfeited remuneration (A) in period in period (B) ($) (%) (%)

Managing Director

D.A. Hoff 75,000 100 0Secretary

R.J. Nicholls 31,250 100 0

Executives – –

F.J. Hardiman 37,500 100 0

P.R. Mastalir – 0 (C)

R.J. Nicholls 31,250 100 0

G. Rufford – 0 100

C.J. Salmon 10,000 31 69

(A) Amounts included in remuneration for the financial reporting period represent the amount that vested in the financial year based on achievement of personal goals and satisfaction of specified performance criteria. no amounts vest in future financial years in respect of the short term incentive cash bonus schemes for the 2006 financial year.

(B) the amounts forfeited are due to the performance of service criteria not being met in relation to the current financial reporting period.

(C) the percentage forfeited cannot be determined as vesting is dependent upon the attainment of specified threshold earnings targets and the maximum potential value is dependent upon actual earnings achieved.

Analysis of prospective bonus payments for future yearsthe vesting profile of the short-term incentive cash bonus which may have vested at the date of this report, or be payable in future financial years if the executive meets pre-determined service and performance criteria awarded as compensation to each director and secretary of the Company and each of the five named Company executives and relevant group executives are detailed below:

Short term incentive cash bonus Value yet to vest or which may vest Financial years in Minimum Maximum which bonus vests or may vest

Director

D.A. Hoff 2008 50,000 75,000SecretaryR.J. Nicholls 2008 20,700 42,525ExecutivesF.J. Hardiman – – –

P.R. Mastalir 2008 0 (A)

R.J. Nicholls 2008 20,700 42,525

G. Rufford – – –

C.J. Salmon – – –

(A) the maximum potential value of the short term incentive cash bonus cannot be determined for these executives as vesting is dependent upon the attainment of specified threshold earnings targets and the maximum potential value is dependant upon actual earnings achieved.

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Options Issued as Part of Remuneration for the year ended 30 June 2007

options may be issued to executives as part of their remuneration. the options are issued to encourage goal alignment between executives, directors and shareholders.

no options were issued to directors or specified executives during the year.

no other options previously issued to directors or the specified executives were exercised during the year.

200,000 options previously issued to D Hoff and exercisable at $1.40 cents per option lapsed during the year.

Employment Contracts

the remuneration and other terms of employment of the Managing Director, David Hoff are formalised in a Service Agreement. the major provisions of the Service Agreement are as follows:

term of agreement – 4 years commencing 1 July 2004.

Base salary inclusive of superannuation to be reviewed annually by the Board of Directors.

provision of a fully maintained motor vehicle.

payment of a termination benefit equal to 12 months of the current base salary and benefits in the event that either party does not renew the Service Agreement on expiry of the 4 year term.

payment of a termination benefit on early termination by the employer, other than in specified circumstances based on misconduct or non-performance, equal to the current base salary and benefits for 12 months or the remaining term of the agreement whichever is the greater.

A notice period of 6 months in respect of early termination of the agreement.

the payment of a performance related cash bonus based on the Consolidated entity achieving specified earnings per share targets.

the remuneration and other terms of engagement of Glenn Molloy, an executive director and consultant, are formalised by agreement in the Minutes of a Meeting of the Directors, which:

provide for an agreed daily rate for attendances at Board meetings ($4,000) and when undertaking consultancy services on behalf of the consolidated entity ($3,000);

do not include any performance related bonus payments, termination or other benefits.

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p.R.Mastalir and Advanced Fluid Systems pty limited, an entity related to Mr Mastalir, provide consultancy services to Rambor pty limited (“Rambor”) and King Cobra Mining equipment pty limited (“King Cobra”) pursuant to the terms of a Consultancy Agreement.

the major provisions of the Consultancy Agreement are as follows:

term of agreement – 5 years commencing 1 July 2007.

Restraints on competition for specified time periods in certain geographical areas in respect of defined services and activities in the event of termination.

early termination provisions on the occurrence of specified events such as, for example, insolvency or the failure or inability to perform the contracted service.

the payment of a performance related cash bonus based on Rambor and/or King Cobra achieving specified earnings before interest and taxation (eBIt) targets.

there are no formalised written contracts in place with any other specified executives.

Any termination payment entitlements would be as determined by general employment law.

OPTIONS

there were no options outstanding as at the date of this report.

DIRECTORS INTERESTS

particulars of Directors’ interests in shares as at the date of this report are as follows:

Ordinary Shares Options

Colin Francis Ryan 500,000 –

David Alfred Hoff 856,960 –

Glenn Robert Molloy 8,543,700 –

Jury Ivan Wowk 87,302 –

Raymond Michael Beath 42,821 –

Meetings of Directors

During the financial year, meetings of directors (including committee meetings) were held.

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Attendances were: Directors’ Committee Meetings Meetings Number Number Number Number eligible attended eligible attended to attend to attend

Colin Francis Ryan 8 8 4 4

Glenn Robert Molloy 8 8 – –

Jury Ivan Wowk 8 8 – –

Raymond Michael Beath 8 7 4 4

David Alfred Hoff 8 8 – 4

RISK & CONTROL COMPLIANCE STATEMENT

under ASX listing Rules and the ASX Corporate Government Council’s principles of Good Corporate Governance and Best practice Recommendations (“Recommendations”), the Company is required to disclose in its Annual Report the extent of its compliance with the Recommendations.

the directors have implemented internal control processes for identifying, evaluating, and managing significant risks to the achievement of the company’s objectives. these internal control processes cover financial, operational and compliance risks. the company’s corporate governance practices are outlined in the Statement of Corporate Governance within the Annual Report.

the directors have received and considered the annual control certification from the Managing Director and the Group Financial Controller in accordance with the Recommendations relating to financial risks.

Material associates and joints ventures, which the company does not control, are not dealt with for the purposes of this statement.

throughout the reporting period, and as the date of signing of this annual report, the company was in compliance with twenty five (25) out of the twenty eight (28) Recommendations in all material respects.

AUDIT COMMITTEE

the consolidated entity has an audit committee, comprised of two non-executive directors Mr R. M. Beath and Mr C. F. Ryan. external auditors are invited to attend from time to time.

DIRECTORS’ AND AUDITORS’ INDEMNIFICATION

During or since the end of the financial year the company has given an indemnity or entered an agreement to indemnify, or paid or agreed to pay insurance premiums as follows:

the company has paid premiums to insure all Directors of the parent entity and officers of the consolidated entity against

liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of director or officer of the company, other than conduct involving a wilful breach of duty in relation to the company. the amount of the premium was $19,313.

DIRECTORS’ BENEFITS

Since 30 June 2006, no director has received or become entitled to receive a benefit because of a contract made by the consolidated entity, or a related body corporate with a director, a firm of which a director is a member or an entity in which a director has a substantial financial interest except for:

Mr Glenn Molloy has an interest in Corso Management Services pty ltd which provides management services to the consolidated entity.

Mr Raymond Beath who is a director of Holden & Bolster Avenir pty ltd which provides tax and accounting services to the consolidated entity in the ordinary course of business.

Mr Jury Wowk:

(a) was a partner in Doherty partners which provided legal services to the consolidated entity in the ordinary course of business during the period to 28 February 2007;

(b) is a partner in Home Wilkinson lowry which has provided legal services to the consolidated entity in the ordinary course of business since 1 March 2007.

this statement excludes a benefit included in the aggregate amount of remuneration received or due and receivable by directors and shown in the company’s accounts, or the fixed salary of a full-time employee of the parent entity, controlled entity, or related body corporate.

NON-AUDIT SERVICES

the Board of directors, in accordance with advice from the audit committee, is satisfied that the provision of non-audit services by BDo Kendalls during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. the directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons:

All non-audit services are reviewed and approved by the Audit committee prior to commencement to ensure that they do not adversely affect the integrity and objectivity of the auditor; and

the nature of the services provided do not compromise the general principles relating to auditor independence as set out in ApeS 110 “Code of ethics for professional Accountants”.

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the following fees for non-audit services were paid to the external auditors during the year ended 30 June 2007:

Accounting & technical Advice $14,100.00

the Board has considered the performance of non-audit services during the year by BDo Kendalls while remaining the company’s auditor and is satisfied that the provision of those non-audit services during the relevant period by the firm was compatible with, and did not compromise, the general standard of independence for auditors imposed by the Corporations Act for the following reasons:

All non-audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed by the Audit Committee to ensure they do not impact the integrity and objectivity of the auditor; and

the non-audit services provided do not undermine the general principles relating to auditor independence as set out in ApeS 110 “Code of ethics for professional Accountants”, as these services did not involve reviewing or auditing the auditor’s own work, acting in management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is included in the Directors’ Report.

AUDIT INDEPENDENCE

the lead auditor’s independence declaration under section 307C of the Corporations Act for the year ended 30 June 2007 is set out on page �1 and forms part of the Directors’ Report.

ROUNDING OF ACCOUNTS

the parent entity has applied the relief available to it in ASIC Class order �8/100 and, accordingly, amounts in the financial statements and directors’ report have been rounded to the nearest thousand dollars.

Signed in accordance with a resolution of the Board of Directors.

ColIn FRAnCIS RYAn Director

Sydney, 24 September 2007

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Income Statementsfor the year ended 30 June 2007

CONSOLIDATED ENTITY PARENT ENTITY

2007 2006 2007 2006 Note $000s $000s $000s $000sSales Revenue from continuing operations 2,837 3,016 – –Cost of sales (1,683) (1,633) – –

Gross Profit 1,154 1,383 – –

Dividends received from related corporations – – – 24,275Distribution received from controlled trust – – – –Interest Received 257 144 98 89Gain/(Loss) on sale of assets 1,305 3 – –Foreign exchange (losses)/gains (55) (53) – –Rental Income received from investment properties 4,403 2,101 – –Other revenues 2,871 302 162 –Warehouse & Distribution expenses (15) (13) – –Selling Expenses (188) (208) – –Administrative expenses (3,487) (1,071) (159) (142)Intercompany loan write-offs – – 15,980 (18,351)Writedown of investments – (220) – –Finance costs (146) (465) – (1,542)

Profit from continuing operations before income tax expense 6,099 1,903 16,081 4,329Income tax (expense)/credit attributable to profit 3 (1,478) 1,546 (192) 2,658

Profit after income tax from continuing operations 4,621 3,449 15,889 6,987Profit after income tax from discontinued operations 35 5,490 843 (1,098) (679)

Profit after income tax 10,111 4,292 14,791 6,308Profit attributable to minority interest – – – –Net profit after income tax attributable to members of the parent entity 10,111 4,292 14,791 6,308

Overall OperationsBasic earnings per share (cents per share) 7 15.9 6.3Diluted earnings per share (cents per share) 7 15.9 6.3Continuing OperationsBasic earnings per share (cents per share) 7.2 5.1Diluted earnings per share (cents per share) 7.2 5.1Discontinued OperationsBasic earnings per share (cents per share) 8.7 1.2Dividends per share 6.5 6.5

The accompanying notes form part of these financial statements

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Balance Sheetsas at 30 June 2007


2007 2006 2007 2006 Note $000s $000s $000s $000sCurrent assetsCash and cash equivalents 8 624 218 250 116Trade and other receivables 9 915 6,295 56 97Inventories 10 741 5,550 – –Derivatives 37 – 13 – –Other 11 2,362 990 31,206 20,005

4,642 13,066 31,512 20,218Assets classified as held for sale 35 – 57,154 – –

Total current assets 4,642 70,220 31,512 20,218

Non-current assetsFinancial assets 12 6,697 265 41,860 54,520Investment Properties 13(a) 41,256 – – –Other Property, plant and equipment 13(b) 2,187 46,665 – –Deferred tax assets 14 1,276 3,251 249 2,500Intangible assets 15 913 2,511 19 –Derivatives 37 890 – – –Other 16 5,612 781 667 781

Total non-current assets 58,831 53,473 42,795 57,801

Total assets 63,473 123,693 74,307 78,019

Current liabilitiesTrade and other payables 17 1,164 3,010 212 40Interest Bearing Liabilities 18 1,374 5,291 16,202 11,038Current tax liabilities 14 3,254 – 3,254 –Provisions 19 357 545 – –Derivatives 37 – – – –Other 20 343 – – –

6,492 8,846 19,668 11,078Liabilities directly associated with assets classified as held for sale 35 – 22,700 – –

Total current liabilities 6,492 31,546 19,668 11,078

Non-current liabilitiesInterest Bearing Liabilities 21 8,434 45,001 6,000 23,231Deferred tax liabilities 14 1,117 85 12 –Provisions 19 471 723 – –Other 22 – – – –

Total non-current liabilities 10,022 45,809 6,012 23,231

Total liabilities 16,514 77,355 25,680 34,309

Net assets 46,959 46,338 48,627 43,710

Shareholders’ equityContributed equity 23 33,573 38,885 33,573 38,885Reserves 24 567 32 8 8Retained earnings 12,819 7,270 15,046 4,817

Total parent entity interest 46,959 46,187 48,627 43,710Minority interest in subsidiaries 25 – 151 – –

Total shareholders’ equity 46,959 46,338 48,627 43,710


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Cash Flow Statementsfor the year ended 30 June 2007


2007 2006 2007 2006 Note $000s $000s $000s $000sCash flows from operating activitiesCash receipts from customers 38,285 109,551 – –Cash payments to suppliers and employees (38,074) (95,645) (397) (1,030)Other revenue 3,883 620 162 –Dividends and distributions received – – – 24,275Interest received 257 149 98 89Income tax (paid)/refunded (175) (902) (1,174) 299Other taxes paid (851) (1,849) – –

Net cash provided by/(used in) operating activities 33 (a) 3,325 11,924 (1,311) 23,633

Cash flows from investing activitiesProceeds from sale of subsidiaries 51,454 797 19,446 –Proceeds from sale of property, plant and equipment 3,707 174 – –Purchase of property, plant and equipment (755) (496) – –Payment for purchase of equity investments, net of cash acquired (4,567) (219) – –Purchase of minority interest in subsidiary – (1,087) – –Payment for intangibles (364) (445) (19) –

Net cash provided by/(used in) investing activities 49,475 (1,276) 19,427 –

Cash flows from financing activitiesProceeds from shares issued – 112 – 112Payment for buyback of shares (5,312) – (5,312) –(Loans to)/Borrowings from related companies – – 11,407 (20,899)Proceeds from borrowings – 3,600 – 3,600Costs of borrowings – – – –Repayment of borrowings (40,413) (5,937) (18,731) (468)Dividends paid by Parent entity (4,562) (4,425) (4,562) (4,425)Interest paid (1,503) (4,077) (784) (1,542)

Net cash (used in) financing activities (51,790) (10,727) (17,982) (23,622)

Net increase/(decrease) in cash held 1,010 (79) 134 11Cash at the beginning of the financial year (1,387) (1,308) 116 105

Cash at the end of the financial year 33 (b) (377) (1,387) 250 116


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Statements of Changes in Equityfor the year ended 30 June 2007

Issued Retained Other Total Minority Capital Earnings Reserves Interest Equity Total $000s $000s $000s $000s $000s $000sConsolidated entityAt 1 July 2005 38,773 7,403 61 46,237 953 47,190Foreign currency translation differences (33) (33) (33)

Total income and expense recognised directly in equity – – (33) (33) – (33)Profit for the year 4,292 4,292 – 4,292

Total income and expense for the year – 4,292 (33) 4,259 – 4,259Dividends paid (4,425) (4,425) (4,425)Shares issued 112 112 112Share based payment expense 4 4 4Acquisition of subsidiary – (802) (802)

At 30 June 2006 38,885 7,270 32 46,187 151 46,338Fair value adjustment in listed securities 799 799 799less deferred tax impact (240) (240) (240)

Total income and expense recognised directly in equity – – 559 559 – 559Profit for the year 10,111 10,111 10,111

Total income and expense for the year – 10,111 559 10,670 – 10,670Dividends paid (4,562) (4,562) (4,562)Shares repurchased (5,312) (5,312) (5,312)Sale of subsidiaries (24) (24) (151) (175)

At 30 June 2007 33,573 12,819 567 46,959 – 46,959

Parent entityAt 1 July 2005 38,773 2,934 4 41,711 41,711Profit for the year 6,308 6,308 6,308

Total income and expense for the year – 6,308 – 6,308 – 6,308Dividends paid (4,425) (4,425) (4,425)Shares issued 112 112 112Share based payment expense 4 4 4

At 30 June 2006 38,885 4,817 8 43,710 – 43,710Profit for the year 14,791 14,791 14,791

Total income and expense for the year – 14,791 – 14,791 – 14,791Dividends paid (4,562) (4,562) (4,562)Shares issued (5,312) (5,312) (5,312)

At 30 June 2007 33,573 15,046 8 48,627 – 48,627

Notes to and forming part of the Financial Statementsfor the year ended 30 June 2007

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NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

the significant policies which have been adopted in the preparation of this financial report are:

(a) Basis of Preparationthe financial report is a general purpose financial report which has been prepared in accordance with Australian equivalents to International Financial Reporting Standards (AIFRS), other authorative pronouncements of the Australian Accounting Standards Board, and the Corporations Act 2001.

the financial report covers the consolidated entity of ppK Group limited and its subsidiaries and ppK Group limited as an individual parent entity. ppK Group limited is a listed public company, incorporated and domiciled in Australia. ppK Group limited is the ultimate parent entity of the Group. the financial statements have been prepared on an accruals basis and are based on historical costs, except for derivatives which have been measured at fair value.

Compliance with Australian equivalents to International Financial Reporting Standards (AIFRS) ensures that the consolidated financial statements and notes comply with International Financial Reporting Standards (IFRS). the parent entity financial statements and notes also comply with IFRS except that it has elected to apply the relief provided to parent entities in respect of certain disclosure requirements contained in AASB 132 Financial Instruments: presentation and Disclosure.

the accounting policies have been consistently applied to the entities of the consolidated entity unless otherwise stated.

the Financial Report is presented in the Australian currency.

the financial report of ppK Group limited for the year ended 30 June 2007 was authorised for issue in accordance with a resolution of the directors on 24 September 2007.

(b) Principles of Consolidationthe consolidated financial statements of the consolidated entity include the accounts of the Company, being the parent entity, and its subsidiaries (“the Group”). Subsidiaries are entities over which the Group has the power to govern the financial and operating policies. A list of all subsidiaries is contained in note 12 to the accounts. All intercompany balances and unrealised profits from transactions between subsidiaries have been eliminated. Where a subsidiary has been acquired or disposed of during the year, its operating results have been included from the date of acquisition or until the date control ceased. Minority interests in the equity and results of entities

controlled by the Company are shown as a separate item in the consolidated accounts.

(c) Goodwill on Consolidation/Discount on AcquisitionGoodwill on consolidation is recorded initially at the amount by which the purchase price for a business or an ownership interest in a subsidiary exceeds the fair value of identifiable net assets acquired and contingent liabilities assumed. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses.

Goodwill acquired is allocated to each of the cash-generating units expected to benefit from the combination’s synergies. Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. Impairment losses on goodwill cannot be reversed.

AASB 3 Business Combinations prohibits goodwill from being amortised and instead requires an impairment test to be carried out.

(d) Revenue and Revenue Recognition

Sales revenueSales revenue comprises revenue earned (net of returns, discounts and allowances) from the provision of products to entities outside the consolidated entity. Sales revenue is recognised when the goods are provided (significant risks and rewards of ownership have passed).

Rental incomeRental income on investment properties is accounted for on a straight-line basis over the lease term. Contingent rentals are recognised as income in the periods when they are earned.

Interest incomeInterest income is recognised as it accrues.

Asset salesGains and losses on sale of assets is recognised on a net basis as other income.

the gain or loss on disposal of assets is brought to account at the date an unconditional contract of sale is signed, or if a conditional contract is signed, the date it becomes unconditional. In the case of real estate sales under AASB 118 it becomes unconditional when title passes.

under the previous accounting policy gross revenue received on disposal of property plant and equipment was included in Revenue.

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(e) InventoriesInventories are valued at the lower of cost and net realisable value. the cost of work in progress and finished goods is derived on an absorption basis which includes an appropriate proportion of manufacturing overheads allocated on the basis of normal operating usage.

(f) Trade Receivablestrade receivables are recognised when the risks and rewards of ownership of the underlining sales transactions have passed to customers. this event usually occurs on delivery of inventories to customers. trade receivables are recorded at nominal amounts.Credit terms are usually 30 days. Collectability of overdue accounts is assessed on an ongoing basis. A provision is made for doubtful debts based on objective evidence that outstanding debtor balances may not be collected.

(g) Income Taxthe income tax expense for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax base of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

exceptions are made for certain temporary differences arising on initial recognition of an asset or liability if they arose in a transaction other than a business combination that at the time of the transaction did not affect either accounting profit or taxable profit.

Deferred tax assets are only recognised for deductible temporary differences and unused tax losses if it is probable that future taxable amounts will be available to utilise those temporary differences and tax losses.

the amount of deferred tax assets which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation, and the anticipation that the consolidated entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and tax bases of investments in subsidiaries, associates and interests in joint ventures where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

the consolidated entity and its wholly owned Australian subsidiaries have formed an income tax consolidated group under the tax Consolidation Regime. As a consequence the parent entity, as the head entity in the tax consolidated group is responsible for recognising the current tax assets and liabilities and deferred tax assets arising from unused tax losses for the tax consolidated group.

Deferred tax assets and liabilities are accounted for by each entity separately using the stand alone taxpayer approach with movements in deferred tax balances being accounted for through the income statement. the tax consolidated group has entered into a tax sharing agreement whereby each company in the group contributes to the income tax payable in proportion to their individually calculated share of the taxable income.

the amounts receivable/payable under tax funding arrangements are due upon notification by the head entity. these amounts are recognised as current intercompany receivables or payables.

(h) InvestmentsAll investments and other financial assets are initially stated at cost, being the fair value of consideration given plus acquisition costs. purchases and sales of investments are recognised on trade date which is the date on which the Group commits to purchase or sell the asset. Accounting policies for each category of investments and other financial assets subsequent to initial recognition are set out below.

Available-for-sale financial assetsAvailable-for-sale financial assets comprise investments in listed and unlisted entities and any non-derivatives that are not classified as any other category, and are classified as non-current assets. unlisted investments do not have a quoted market price in an active market and their fair value cannot be reliably measured, so they remain valued at their cost after initial recognition. listed investments are valued subsequent to initial recognition at fair value based on current bid prices.


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Held for trading financial assetsInvestments classified as Held for trading are measured at fair value with gains or losses recognised in the income statement. A financial asset is classified Held for trading if acquired principally for the purpose of selling in the short term or if it is a derivative that is not designated as a hedge.

SubsidiariesInvestments in subsidiaries are accounted for in the consolidated financial statements as described in note 1(a) and in the parent entity financial statements at cost in accordance with the cost alternative permitted in separate financial statements under AASB 127 Consolidated and Separate Financial Statements.

(i) Investment Property & Property, Plant and Equipment

Investment propertiesInvestment properties are initially measured at cost including transaction costs. Subsequent to initial recognition, investment properties are carried at cost, less depreciation and any impairment losses.

Depreciation on investment properties is calculated on a straight-line basis over the estimated useful life of the asset of 50 years.

the assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at each balance sheet date.

Gains and losses on disposals are calculated as the difference between the net disposal proceeds and the asset’s carrying amount and are included in the income statement in the year that the item is derecognised.

Other property, plant and equipmentother property, plant and equipment are brought to account at cost less, where applicable, any accumulated depreciation or amortisation.

the cost of fixed assets constructed within the consolidated entity includes the cost of materials used in construction, direct labour and an appropriate proportion of fixed and variable overheads.

the depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold land, is depreciated over their useful lives to the consolidated entity commencing from the time the asset is held ready for use. leasehold improvements are amortised over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

the gain or loss on disposal of all fixed assets is determined as the difference between the carrying amount of the asset at the time of disposal and the proceeds of disposal, and is included in profit before income tax of the consolidated entity in the year of disposal.

the depreciation rates used for each class of depreciable assets are:

Depreciation RateClass of Fixed Asset Straight Line

Buildings 2%leasehold Improvements over the term of the leaseplant & equipment 3–33 %leased plant & equipment 3–33 %

Non-current assets classified as held for resalenon-current assets classified as held for sale are those assets whose carrying amounts will be recovered principally through a sale transaction rather than through continuing use. these assets are stated at the lower of their carrying amount and fair value less costs to sell and are not depreciated or amortised. Interest expense continues to be recognised on liabilities of a disposal group classified as an asset held for sale.

An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is recognised for subsequent increases in fair value less costs to sell of an asset but not exceeding any cumulative impairment losses previously recognised.

NOTE 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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A discontinued operation is a component of the group that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. the results of discontinued operations are presented separately on the face of the income statement.

(j) Leased AssetsFor leases, a distinction is made between finance leases which effectively transfers from the lessor to the lessee substantially all the risks and benefits incidental to ownership of the leased property, and operating leases under which the lessor retains all such risks and benefits. Where fixed assets are acquired by means of finance leases, the lower of the present value of lease payments or the fair value of the leased property is established as an asset at the beginning of the lease term and amortised on a straight line basis over its expected useful life.

A corresponding liability is also established and each lease payment is allocated between such liability and interest expense so as to achieve a constant rate of interest on the remaining balance of the liability.

operating lease payments are charged to the income statement on a straight line basis over the period of the lease.

(k) Foreign Currency

Transactions and balancesForeign currency transactions during the period are converted to Australian currency at the rates of exchange applicable at the dates of the transactions. Amounts receivable and payable in foreign currency at balance date are converted at the rates of exchange ruling at year end.

the gains and losses from conversion of short term balances, whether realised or unrealised, are included in operating results. the group previously did not recognise derivative financial instruments in the financial statements. under AIFRS, all derivatives contracts, predominantly hedging instruments, are carried at fair value in the Balance Sheet. the group has currently elected not to hedge account these instruments.

Translationthe functional currency of the overseas subsidiaries is new Zealand dollars. At reporting date, the assets and liabilities of these overseas subsidiaries are translated into the presentation currency of ppK Group limited at the closing rate at balance sheet date and income and expenses are translated at the weighted average exchange rates for the year. All resulting exchange differences are recognised as a separate component of equity (foreign currency translation reserve). on disposal of a foreign entity, the cumulative exchange differences recognised in foreign currency translation reserves relating to that particular foreign operation is recognised in the income statement.

(l) Trade and Other payablesthese amounts represent unpaid liabilities for goods received and services provided to the company and consolidated entity prior to the end of the financial year. the amounts are unsecured and are normally settled within 30 to 60 days, except for imported items for which �0 or 120 day payment terms are normally available.

(m) Bank LoansAll loans and borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income statement over the period of the loans and borrowings using the effective interest method. Bank loans are subject to set-off arrangements.

(n) Employee Benefitsprovision is made for the liability for employee benefits arising from services rendered by employees to balance date. employee benefits expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled plus related on-costs. other employee benefits payable later than one year have been measured at the present value of the future cash outflows to be made for those benefits, discounted using national government bond rates at balance date with terms to maturity and currency that match as closely as possible the estimated future cash outflows.

the Group makes payments to defined contribution superannuation funds in order to meet superannuation guarantee legislation requirements. Contributions are recognised as expenses as they become payable.


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(o) CashFor the purposes of the cashflow statement, cash includes cash on hand and at call deposits with banks or financial institutions, net of bank overdrafts.

(p) Intangible assetsAcquired Brand names are recorded at cost and are classified as indefinite useful life intangible assets under AASB 138 Intangible Assets and will be subject to annual impairment review. other Intangible assets such as patents and Computer Software are recorded at cost and amortised on a straight line basis over the number of years of their expected benefit which ranges from 3 to 10 years.

(q) Impairment of AssetsAt each reporting date the Group assesses whether there is an indication that individual assets are impaired. Where impairment indicators exist, recoverable amount is determined and impairment losses are recognised in the income statement where the asset’s carrying value exceeds its recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purpose of assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Where it is not possible to estimate recoverable amount for an individual asset, recoverable amount is determined for the cash-generating unit to which the asset belongs.

(r) Derivative financial instrumentsthe Group uses derivative financial instruments such as forward foreign exchange contracts and interest rate swaps to mitigate its risk associated with interest rate and foreign currency fluctuations. Such derivatives are stated at fair value. the fair value of forward exchange contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles. the fair value of interest rate swap contracts is determined by reference to market values for similar instruments.

For derivatives that do not qualify for hedge accounting, any gains or losses on changes in fair value are taken directly to net profit or loss for the year. Such assets are classified as financial assets held for trading.

For derivatives that qualify for hedge accounting, the method for recognising gains and losses on changes in fair value depends on whether the derivative is classified as a fair value hedge or a cash flow hedge. Derivatives are classified as fair value hedges when they hedge the exposure to changes in fair value of a recognised asset or liability and as cash flow hedges when they hedge exposure to variability in cash flows that are attributable to either a particular risk associated with a recognised asset or liability or to a forecast transaction. the Group documents at inception of the hedge the relationship between the hedging instruments (derivatives) and the hedged items, as well as the risk management objective and strategy for undertaking the hedge transaction. the Group also documents, both at inception of the hedge and on an ongoing basis whether the derivatives that are used in the hedging transactions have been, and will continue to be, highly effective in offsetting changes in fair values or cash flows of hedged items. At this point in time the group has chosen not to hedge account for these financial instruments.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. the effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in equity in the hedging reserve and transferred to the income statement when the hedged item affects profit or loss. the gain or loss relating to the ineffective portion is recognised immediately in the income statement. However, when the cash flow hedge relates to a forward exchange contract to hedge a highly probable forecast transaction or firm commitment that results in a non-financial asset (e.g. inventory) or a non-financial liability, the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the initial cost or carrying amount of the asset or liability.

Hedge accounting is discontinued when the hedging instrument expires, or is sold, terminated or exercised, or no longer qualifies for hedge accounting. At that point in time any cumulative gains or losses on the hedging instrument recognised in equity is kept in equity until the forecast transaction occurs. If the forecast transaction is no longer expected to occur, the net cumulative gain or loss recognised in equity is transferred to the income statement and recognised in net profit or loss for the year.


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(s) Finance costsAll interest costs are recognised in income in the period in which they are incurred.

(t) Share-Based Paymentsthe group recognises an expense for all share-based remuneration, including deferred shares and options, and amortises those expenses over the relevant vesting periods.

no expense has been recognised in respect of options granted before 7 november 2002. Shares are recognised when options are exercised and the proceeds received are allocated to share capital.

(u) Comparative FiguresWhere required by Accounting standards comparative figures have been adjusted to conform with changes in presentation for the current financial year.

(v) Rounding of Amountsthe parent entity has applied the relief available under ASIC Class order �8/100 and accordingly, amounts in the financial statements and directors’ report have been rounded to the nearest thousand dollars, or in certain cases, to the nearest dollar.

(w) Dividendsprovision is made for dividends declared, and no longer at the discretion of the Group, on or before the end of the financial year but not distributed at balance date.

(x) Earnings per share

Basic earnings per shareBasic earnings per share is calculated by dividing the profit attributable to members of ppK Group limited, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares during the year.

Diluted earnings per shareearnings used to calculate diluted earnings per share are calculated by adjusting the basic earnings by the after-tax effect of dividends and interest associated with dilutive potential ordinary shares. the weighted average number of shares used is adjusted for the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

(y) GSTRevenues and expenses are recognised net of GSt except where GSt incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GSt is recognised as part of the cost of acquisition of the asset or as part of the expense item.

Receivables and payables are stated with the amount of GSt included. the net amount of GSt recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

Cash flows are included in the cash flow statement on a gross basis and the GSt component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GSt recoverable from, or payable to, the taxation authority.


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(Z) Accounting Standards Issued But Not Yet Effectivethe following new/amended accounting standards and interpretations have been issued, but are not mandatory for financial years ended 30 June 2007. they have not been adopted in preparing the financial report for the year ended 30 June 2007 and are expected to impact the entity in the period of initial application. In all cases the entity intends to apply these standards from application date as indicated in the table below.

AASB referenceTitle and Affected Standard(s): Nature of Change Application date:

Impact on Initial Application

AASB Interpretation 10 (issued Sept 2006)

Interim Financial Reporting and Impairment

prevents the reversal of impairment losses on goodwill, investments in equity instruments carried at cost and available-for-sale financial assets being reversed in the annual financial report.

periods commencing on or after 1 november 2006

there will be no impact because the entity has not previously made any impairment write-downs on these items during an interim reporting period (or has not subsequently reversed such impairment write-downs).

AASB Interpretation 11 (issued Feb 2007)

AASB 2 – Group and treasury Share transactions

Clarifies the accounting treatment under AASB 2: Share-Based payments where the parent entity grants rights to its equity instruments to employees of its subsidiaries, or where a subsidiary grants to its employees rights to equity instruments of its parent.

periods commencing on or after 1 March 2007

there will be no impact because at the reporting date the entity has not issued any equity instruments to employees of subsidiaries.

AASB 2007-4 (issued Apr 2007)

Amendments to Australian Accounting Standards arising from eD 151 and other Amendments [AASB 1, 2, 3, 4, 5, 6, 7, 102, 107, 108, 110, 112, 114, 116, 117, 118, 11�, 120, 121, 127, 128, 12�, 130, 131, 132, 133, 134, 136, 137, 138, 13�, 141, 1023 and 1038]

Inserts accounting treatment options that currently exist under IFRSs back into AIFRSs and removes Australian-specific disclosures that were originally added into AIFRSs on first-time adoption from 1 January 2005.

periods commencing on or after 1 July 2007

Most changes relate to certain Australian-specific disclosures not being required.

the entity does not intend to adopt any reinstated options for accounting treatment when the standard is adopted. As such. there will be no future financial impacts on the financial statements.

AASB Interpretation 12 (issued Feb 2007)

Service Concession Arrangements (recognition and measurement)

Guidance for accounting by operators for public-to-private service concession arrangements.

periods commencing on or after 1 January 2008

there will be no impact as a result of this standard.


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AASB Interpretation 13

Customer loyalty programmes

the fair value of revenue is to be allocated between sales and reward credits, resulting in a portion of revenue being deferred until reward credits are redeemed.

periods commencing on or after 1 July 2008

there will be no impact as the entity does not have a customer loyalty programme

AASB 123 (revised Jun 2007)

Borrowing Costs to the extent that borrowing costs are directly attributable to the acquisition, construction or production of a qualifying asset, the option of recognising borrowing costs immediately as an expense has been removed. Consequently all borrowing costs for qualifying assets will have to be capitalised.

periods commencing on or after 1 January 200�

the transitional provisions of this standard only require capitalisation of borrowing costs on qualifying assets where commencement date for capitalisation is on or after 1 January 200�. As such, there will be no impact on prior period financial statements when this standard is adopted.

AASB 7 (issued Aug 2005)

Financial Instruments: Disclosures

Replaces the disclosure requirements relating to financial instruments currently included in AASB 132: Disclosure and presentation

Annual periods commencing on or after 1 January 2007

As this is a disclosure standard only, there will be no impact on amounts recognised in the financial statements. However, various additional disclosures will be required about the group’s and the parent entity’s financial instruments.

AASB 101 (revised oct 2006)

presentation of Financial Statements

Removes Australian specific disclosure requirements.

Annual reporting periods commencing on or after 1 January 2007

As these changes result in a reduction of Australian-specific disclosures, there will be no impact on amounts recognised in the financial statements.

AASB Int 12� (issued Feb 2007)

Service Concession Arrangements: Disclosures [revised]

Increases disclosure requirements for service concession arrangements

periods commencing on or after 1 January 2008

As this is a disclosure standard only, there will be no impact on amounts recognised in the financial statements. However, various additional disclosures will be required about service concession arrangements.


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AASB 8 (Issued Feb 2007)

operating Segments Replaces the disclosure requirements of AASB 114: Segment Reporting.

periods commencing on or after 1 January 200�

As this is a disclosure standard only, there will be no impact on amounts recognised in the financial statements. However, disclosures required for the operating segments will be significantly different to what is currently reported (business and geographical segment).

Critical accounting estimates and judgementsthe directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group.

Key estimates – Impairmentthe Group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

no impairment has been recognised in respect of goodwill or brand names for the current financial year. Refer to note 15 for details of assumptions used in estimating the recoverable amount of these assets.

Key judgements – Classification as Held for Salethe Group classifies assets as held for sale where an asset (or disposal group) is available for immediate sale in its present

condition subject only to terms that are usual and customary for sales of such assets (or disposal groups) and the sale is highly probable. For the sale to be assessed as highly probable, management must be committed to a plan to sell the asset (or disposal group), and an active program to locate a buyer and complete the plan must have been initiated. Further, the asset (or disposal group) must be actively marketed for sale at a price that is reasonable in relation to its current fair value. In addition, the sale should be expected to qualify for recognition as a completed sale within one year from the date of classification and actions required to complete the plan should indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

the sale of the plastics packaging business was assessed as highly probable as at 30 June 2006, and this assessment was proved reasonable by the sale occurring on 1 September 2006. the assessment was made by 3 directors independently assigning weighted probabilities to the various factors which may have prevented the sale occuring. the possibility of none of these factors eventuating (and thereby preventing the sale) was assessed to be in the range of 85% to ��%, which the directors determined meant that the sale was highly probable.


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2007 2006 2007 2006 $000s $000s $000s $000s

NOTE 2 REVENUE, OTHER INCOME & EXPENSES FROM OPERATIONS

(a) RevenueSale of goods 34,112 98,408 – –Rental income – external 4,403 326 – –Dividends received and receivable – – – 24,275Distribution received from controlled trust – – – –Interest received – other parties 257 149 98 89Deferred income 2 29 – –

38,774 98,912 98 24,364

(b) Other incomeNet gain on disposal of plant and equipment 1,305 149 – –Net gain on disposal of subsidiary 10,729 – 6,185 –Fair value adjustment on derivative 2,644 – – –Sundry income 323 294 162 –

15,001 443 6,347 –

(c) ExpensesProfit before income tax has been determined after:Amortisation – leased assets 43 760 – – – intangibles 85 110 – –

Total Amortisation 128 870 – –

Depreciation – buildings 484 467 – – – plant and equipment 593 4,046 – –

1,077 4,513 – –

Foreign currency translation losses 55 136 – –Interest paid – other 1,447 3,666 784 1,542 – finance lease charges 56 407 – –Provisions – employee entitlements 896 1,673 – – – doubtful debts (trade) 539 51 – –Defined contribution superannuation expense 916 1,593 – –Employee benefit expenses 9,969 22,598Rental expense on operating leases 909 1,145 – –

The above revenues and expenses apply to both continuing and discontinuing operations.

Refer to Notes 31 and 35 for further breakdown.


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2007 2006 2007 2006 $000s $000s $000s $000s

NOTE 2 REVENUE, OTHER INCOME & EXPENSES FROM OPERATIONS (continued)

(d) Individually significant items – gains or (losses)Sale of Plastics Packaging business 10,708 – 6,185 –Sale of York Precision Plastics (159) – – –Sale of rental property 1,295 – – –Fair value adjustment on derivative 2,644 – – –Costs of preparing Plastics Packaging business for sale – (970) – (970)Writedown in investment of EZI Automation – (220) – –Gain on sale of Advanced Power – 172 – –Intercompany loan write-off – – 15,980 18,351

14,488 (1,018) 22,165 17,381

The above revenues and expenses apply to both continuing and discontinuing operations.

Refer to Notes 31 and 35 for further breakdown.

NOTE 3 INCOME TAX EXPENSE

(a) The prima facie tax payable on the profit before income tax is reconciled to the income tax as follows:Profit before tax from continuing operations 6,099 1,903 16,081 5,299Profit before tax from discontinuing operations 10,661 1,076 5,401 (970)

Total Profit before tax 16,760 2,979 21,482 4,329

Prima facie tax payable at 30% (2006: 30%) 5,028 894 6,445 1,299Intergroup distributions not assessable under tax consolidation regime – – – (7,283)Intercompany loan forgiveness not deductible under tax consolidation regime – – (4,794) 5,505Previously unrecognised capital losses recognised as a deferred tax asset – (1,993) – (1,993)Research & Development concession (15) (90) – –Building allowance (86) (83) (24) (80)Capital profit on sale of assets 1,510 (51) 4,878 –Sundry items 14 16 – –Under/(Over) provision relating to prior year 186 (6) 186 (106)

Income tax expense/(credit) 6,637 (1,313) 6,691 (2,658)

The applicable weighted average effective tax rates are as follows: 40% –44% 31% –61%

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2007 2006 2007 2006 $000s $000s $000s $000s

NOTE 3 INCOME TAX EXPENSE (continued)

(b) The components of tax expense comprise:Current tax 3,243 617 4,242 (572)Deferred tax 3,208 (1,924) 2,263 (2,271)Underprovision in respect of prior years 186 (6) 186 (106)

6,637 (1,313) 6,691 (2,949)

The tax expense comprises:– Tax expense from continuing operations 1,478 (1,546) 192 (2,658)– Tax expense from discontinuing operations 5,159 233 6,499 (291)

6,637 (1,313) 6,691 (2,949)

(c) Deferred tax recognised directly in eqity through Available for Sale Financial Assets Reserverelating to restating investments as marked to market. 240 – – –

PPK Group Limited (PPK) has formed a consolidated group for income tax purposes, effective on and from 1 July 2003, with each of its wholly owned Australian subsidiaries.PPK, as the head entity, has recognised all current income tax assets and liabilities relating to the consolidated group.The entities within the Group have entered into a tax sharing agreement where each subsidiary will compensate PPK for the amount of tax payable that would be calculated as if the subsidiary was a tax paying entity.


2007 2006 2007 2006 $ $ $ $

NOTE 4 AUDITORS’ REMUNERATION

Remuneration of the auditor of the parent entity for:– auditing or reviewing the financial report 244,632 226,019 – 10,000– non audit services (accounting/technical advice) 14,100 24,200 11,000 14,500Remuneration of the auditors of subsidiaries for:– auditing or reviewing the financial report of subsidiaries

by Parent entity auditor – 21,581 – –– auditing or reviewing the financial report of subsidiaries

by other auditors 335 2,144 – –

259,067 273,944 11,000 24,500


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NOTE 5 KEY MANAGEMENT PERSONNEL DISCLOSURES

(a) Names and positions held of directors and other key management personnel in office at any time during the financial year are:

DirectorsMr C.F. Ryan Chairman – Non-ExecutiveMr G.R. Molloy Director – ExecutiveMr R.M.Beath Director – Non ExecutiveMr J.I. Wowk Director – Non ExecutiveMr D.A. Hoff Managing Director

OtherMr F.J. Hardiman Chief Financial OfficerMr R.J. Nicholls General Counsel and Company Secretary

(b) Remuneration of Key management personnel – directors

Short-term Post Long Term benefits Employment Benefits

Proportion of Super- Long remuneration Salary, Fees & Non-Cash annuation Service Termination performance Commissions Bonuses Benefits Contributions Leave Benefits Total related $ $ $ $ $ $ $ %

2007Mr C.F. Ryan 72,000 – – – – – 72,000 –Mr G.R. Molloy 259,500 – – 28,050 – – 287,550 –Mr R.M.Beath 48,000 – – – – – 48,000 –Mr J.I. Wowk 48,000 – – – – – 48,000 –Mr D.A. Hoff 216,333 125,000 36,043 85,230 4,651 84,000 551,257 22.7

643,833 125,000 36,043 113,280 4,651 84,000 1,006,807

2006Mr C.F. Ryan 72,000 – – – – – 72,000 –Mr G.R. Molloy 42,000 – – 100,000 – – 142,000 –Mr R.M.Beath 48,000 – – – – – 48,000 –Mr J.I. Wowk 48,000 – – – – – 48,000 –Mr D.A. Hoff 211,154 – 51,551 84,139 4,664 84,000 435,508 –

421,154 – 51,551 184,139 4,664 84,000 745,508

The service and performance criteria set to determine remuneration are included in Note 5 (i).A $75,000 bonus for David Hoff was granted on 1 September 2006. The performance criteria was satisfactory completion of the plastics packaging sale. Payment was made via additional superannuation contribution.A $50,000 bonus for David Hoff has been accrued but not yet paid based on fulfilment of predetermined performance objectives and earnings targets in the 2007 financial year.

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NOTE 5 KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)

(c) Remuneration of Key management personnel – other Short-term Post Long Term benefits Employment Benefits

Proportion of Super- Long remuneration Salary, Fees & Non-Cash annuation Service Termination performance Commissions Bonuses Benefits Contributions Leave Benefits Total related $ $ $ $ $ $ $ %

2007Mr F.J. Hardiman 152,368 37,500 18,791 12,186 4,048 179,706 404,599 9.3Mr R.J. Nicholls 152,234 51,950 6,834 12,909 2,249 – 226,176 22.9

304,602 89,450 25,625 25,095 6,297 179,706 630,775

2006Mr F.J. Hardiman 159,737 – 24,508 12,139 9,407 – 205,791 –Mr R.J. Nicholls 139,352 – 19,271 11,842 3,884 – 174,349 –Mr P.L. Crocker 176,311 – 23,902 22,313 4,198 – 226,724 –

475,400 – 67,681 46,294 17,489 – 606,864

The service and performance criteria set to determine remuneration are included in Note 5 (i).Bonuses of $37,500 for Frank Hardiman and $31,250 for Robert Nicholls were granted on 1 September 2006. The performance criteria was satisfactory completion of the plastics packaging sale. Payment to Frank Hardiman was $20,000 in cash and $17,500 via additional superannuation contribution. Payment to Robert Nicholls was made in cash.A bonus of $20,700 was paid to Robert Nicholls in cash on 11 August 2007 based on fulfilment of predetermined performance objectives and earnings targets in the 2007 financial year.

(d) Remuneration OptionsNo options were granted to Directors in the current or prior year.No options were granted to other key management personnel in the current or prior year.

(e) Shares Issued on Exercise of Remuneration OptionsThere was no exercise of remuneration options during the year and therefore no shares issued.


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(f) Options and Rights Holdings

Number of Options held by Key management personnel – 2007 Total Total Total Exer- Unexer- Balance Granted as Options Balance Vested cisable cisable 1.7.06 Remuneration Exercised Lapsed 30.6.07 30.6.07 30.6.07 30.6.07

Parent Entity DirectorsMr C.F. Ryan 300,000 – – – 300,000 300,000 300,000 –Mr R.M. Beath 300,000 – – – 300,000 300,000 300,000 –Mr J.I. Wowk 300,000 – – – 300,000 300,000 300,000 –Mr D.A. Hoff 200,000 – – 200,000 – – – –Other key management personnelMr F.J. Hardiman – – – – – – – –Mr R.J. Nicholls – – – – – – – –Mr P.L. Crocker 25,000 – – 25,000 – – – –

Total 1,125,000 – – 225,000 900,000 900,000 900,000 –

Number of Options held by Key management personnel – 2006 Total Total Total Exer- Unexer- Balance Granted as Options Balance Vested cisable cisable 1.7.05 Remuneration Exercised Lapsed 30.6.06 30.6.06 30.6.06 30.6.06

Parent Entity DirectorsMr C.F. Ryan 300,000 – – – 300,000 300,000 300,000 –Mr R.M. Beath 300,000 – – – 300,000 300,000 300,000 –Mr J.I. Wowk 300,000 – – – 300,000 300,000 300,000 –Mr D.A. Hoff 300,000 – – 100,000 200,000 200,000 200,000 –Other key management personnelMr F.J. Hardiman – – – – – – – –Mr R.J. Nicholls – – – – – – – –Mr P.L. Crocker 25,000 – – – 25,000 25,000 25,000 –

Total 1,225,000 – – 100,000 1,125,000 1,125,000 1,125,000 –

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(g) Shareholdings

Number of Shares held by Parent Entity Directors and Key management personnel – 2007

Balance Received as Options Net Change Balance 1.7.06 Remuneration Exercised Other 30.6.07Parent Entity DirectorsMr C.F. Ryan 500,000 – – – 500,000Mr G.R. Molloy 7,952,905 – – 594,365 8,547,270Mr R.M. Beath 42,821 – – – 42,821Mr J.I. Wowk 87,302 – – – 87,302Mr D.A. Hoff 856,960 – – – 856,960Other management –Mr F.J. Hardiman 418,172 – – (94,000) 324,172Mr R.J. Nicholls 70,625 – – – 70,625

9,928,785 – – 500,365 10,429,150

Number of Shares held by Parent Entity Directors and Key management personnel – 2006

Balance Received as Options Net Change Balance 1.7.05 Remuneration Exercised Other 30.6.06Parent Entity DirectorsMr C.F. Ryan 500,000 – – – 500,000Mr G.R. Molloy 7,572,893 – – 380,012 7,952,905Mr R.M.Beath 42,821 – – – 42,821Mr J.I. Wowk 87,302 – – – 87,302Mr D.A. Hoff 856,960 – – – 856,960Specified ExecutivesMr F.J. Hardiman 418,172 – – – 418,172Mr R.J. Nicholls 70,625 – – – 70,625Mr P.L. Crocker 70,000 – – – 70,000

9,618,773 – – 380,012 9,998,785


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(h) LoansLoans advanced to Parent Entity Directors and Key management personnel Highest Indebtedness Balance Net Change Balance Interest Paid during 1.7.06 Other 30.6.07 or Payable the Year $ $ $ $ $2007 Parent Entity Directors Mr D.A. Hoff 437,500 – 437,500 40,903 439,307Other managementMr F.J. Hardiman 83,375 – 83,375 7,811 83,744Mr R.J. Nicholls 16,905 (438) 16,467 1,562 16,905

537,780 (438) 537,342

Highest Indebtedness Balance Net Change Balance Interest Paid during 1.7.05 Other 30.6.06 or Payable the Year $ $ $ $ $2006Parent Entity Directors Mr D.A. Hoff 437,500 – 437,500 38,419 437,500Specified ExecutivesMr F.J. Hardiman 83,375 – 83,375 7,321 83,375Mr R.J. Nicholls 16,905 – 16,905 1,278 16,905Mr P.L. Crocker 45,500 – 45,500 3,995 45,500

583,280 – 583,280

Loans to key management personnel excluding directors are made pursuant to the PPK Executive Incentive Scheme to assist in the exercise of options to acquire shares in the Parent Entity. Loans are limited to 70% of the current market value of the shares at the time of the loan. Loans are for a term of 5 years or immediately repayable on termination of employment. Interest only is payable monthly in arrears at a rate which is 3.25% above the current Reserve Bank of Australia Cash Rate. Security for the loans is by way of a holding lock over the shares acquired with the loans. The loans are limited recourse, limited to the realisable value of the shares. The lender has the right to sell or buy back the shares in the event that the value of the shares held as security falls below the purchase price of the shares or the amount lent to acquire the shares. The loan to the Managing Director, as approved by shareholders, is on identical terms.

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(i) Remuneration Practices

Non-Executive Directorsthe remuneration of non-executive directors is determined by the Board from the maximum amount available for distribution to the non-executive directors as approved by the shareholders. In determining the appropriate level of directors fees, data from surveys undertaken of other public companies similar in size or market section to ppK is taken into account.

non-executives do not receive performance related remuneration.

Executive Directors and Senior Executivesexecutive directors do not receive directors fees.

the Board of Directors is responsible for approving remuneration policies and packages applicable to senior executives of the Company. the broad remuneration policy is to ensure the remuneration package properly reflects the person’s duties and responsibilities, and that remuneration is competitive in attracting, retaining and motivating people of the highest quality and standard to enable the organisation to succeed.

A review of the compensation arrangements for executive directors and Senior executives is conducted by the full Board at a duly constituted Directors Meeting.

the ppK Board conducts its review annually and is based on established criteria which includes:

the individual’s performance;

reference to market data for broadly comparable positions or skill sets in similar organisations or industry;

the Company’s performance during the relevant period; and

the broad remuneration policy objective of the Company.

Senior executives and executive directors may receive bonuses based on the achievement of specific goals related to the performance of the consolidated entity. A significant proportion of bonus payments to key management personnel is determined based on the earnings of either the consolidated entity or the individual company or companies in which the key management personnel perform his or her primary duties and responsibilities. the Managing director is obliged to meet key performance measures based on predetermined epS targets before becoming eligible for a bonus payment.

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An executive incentive scheme approved by shareholders is in place, which provides the Board with the discretion to grant options and provide loans to eligible executives for the purpose of acquiring Scheme Shares.

the Board exercises its discretion under the ppK executive Incentive Scheme in a manner consistent with the broad remuneration policy objectives of the Company. the grant of options to executives is linked to significant performance hurdles including the exercise price of the options being subject to material improvement in company performance (measured by its share price) during a restricted exercise period.

Directors are not entitled to participate in the ppK employee Incentive Scheme. the grant of options to the Managing Director was determined by reference to the terms of his prevailing Service Agreement with the Company, the listing Rules and the law.

ppK will not generally use options as a means of remuneration for non-executive directors and will continue to remunerate these directors by means of the payment of cash benefits.

the remuneration and other terms of employment for the Managing Director, David Hoff are formalised in a Service Agreement. the major provisions of the Service Agreement include the following:

term of Agreement – 4 years commencing 1 July 2004.

Base salary inclusive of superannuation for the year ended 30 June 2005 of $2�1,584 to be reviewed annually by the Board of Directors.

provision of a fully maintained motor vehicle.

payment of a termination benefit equal to 12 months of the current base salary and benefits in the event that either party does not renew the Service Agreement on expiry of the 4 year term.

payment of a termination benefit on early termination by the employer, other than in specified circumstances based on misconduct or non-performance, equal to the current base salary and benefits for 12 months or the remaining term of the agreement whichever is the greater.

the payment of performance related cash bonus based on the Consolidated entity achieving specified earnings per share targets.

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the remuneration and other terms of engagement of Glenn Molloy, an executive director and consultant, are formalised by recording in the Minutes of the Directors meeting approving same and:

provide for an agreed daily rate for attendances at monthly Board meetings ($4,000) and when undertaking consultancy services on behalf of the Consolidated entity ($3,000).

Do not include any performance related bonus payments, termination or other benefits.

Mr Molloy may also be paid a success fee on terms approved by the Board in respect of work undertaken on mergers, acquisitions and divestment activities.

p.R.Mastalir and Advanced Fluid Systems pty limited, an entity related to Mr Mastalir, provide consultancy services to Rambor pty limited (Rambor) and King Cobra Mining equipment pty limited (King Cobra) pursuant to the terms of a Consultancy Agreement. the major provisions of the Consultancy Agreement are as follows:

term of agreement – 5 years commencing 25 February 2005.

Restraints on competition for specified time periods in certain geographical areas in respect of defined services and activities in the event of termination.

early termination provisions on the occurrence of specified events such as, for example, insolvency or the failure or inability to perform the contracted service.

the payment of a performance related cash bonus based on Rambor and/or King Cobra achieving specified earnings before interest and taxation (eBIt) targets.

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there are no written agreements in place with any other specified executives. Any termination payment entitlements would be as determined by general employment law.

(j) Other transactions with directors

Refer to note 32 for further details of transactions with directors and director related entities.

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2007 2006 2007 2006 $000s $000s $000s $000s

NOTE 6 DIVIDENDS

(a) Dividends paidInterim ordinary dividend of 3.25c per share – 100% franked at 30% tax rate (prior year 2.75c per share) 2,005 1,872 2,005 1,872Final ordinary dividend of 3.75c per share – 100% franked at 30% tax rate (2006 3.75c per share – 100% franked) 2,557 2,553 2,557 2,553

4,562 4,425 4,562 4,425

(b) Dividends declared after balance dateFinal ordinary dividend of 3.25c per share – 100% franked and amounting to $1,989,000 not included as declared after balance date.Special dividend of 5c per share – 100% franked and amounting to $3,059,000 not included as declared after balance date.(c) Franked dividendsThe franked portions of the final dividends recommended after 30 June 2007 will be franked out of existing franking credits or out of franking credits arising from the payment of income tax in the year ending 30 June 2007.


2007 2006 2007 2006 $000s $000s $000s $000sFranking credits available for subsequent financial years based on a tax rate of 30% (2006 – 30%) 7,084 4,935 7,084 4,935

The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:(a) franking credits that will arise from the payment of the current tax liability(b) franking debits that will arise from the payment of dividends recognised as a liability at the reporting date(c) franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date, and(d) franking credits that may be prevented from being distributed in subsequent financial years.

The consolidated amounts include franking credits that would be available to the parent entity if distributable profits of subsidiaries were paid as dividends.Under legislation that took effect on 1 July 2002, the amount recorded in the franking account is the amount of Australian income tax paid, rather than franking credits based on after tax profits, and amounts debited to that account in respect of dividends paid after 30 June 2002 are the franking credits attaching to those dividends rather than the gross amount of the dividends.


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CONSOLIDATED ENTITY

2007 2006 $000s $000s

NOTE 7 EARNINGS PER SHARE

Basic earnings per share (cents per share)Continuing operations 7.2 5.1Discontinuing operations 8.7 1.2

15.9 6.3

Diluted earnings per share (cents per share)Continuing operations 7.2 5.1Discontinuing operations 8.7 1.2

15.9 6.3

(a) Reconciliation of Earnings to Net ProfitEarnings used in calculating Basic EPSContinuing operations 4,621 3,449Discontinuing operations 5,490 843

10,111 4,292

Earnings used in calculating Diluted EPSContinuing operations 4,621 3,449Discontinuing operations 5,490 843

10,111 4,292

No. No.(b) Weighted average number of ordinary shares outstanding during the year used in calculation of basic EPS 63,783,326 68,067,420

Potential ordinary shares assumed to have been issued for no consideration – –

Weighted average number of ordinary shares outstanding during the year used in calculation of diluted EPS 63,783,326 68,067,420

(c) Classification of SecuritiesThe only securities that have been classified as potential ordinary shares and included in calculation of diluted EPS are options outstanding.

(d) 900,000 non dilutive potential ordinary shares were on issue at 30 June 2007. These relate to out of the money options.

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2007 2006 2007 2006 Note $000s $000s $000s $000s

CURRENT ASSETS

NOTE 8 CASH ASSETS

Cash at bank and on hand 624 222 250 116Less Classified as assets held for saleCash at bank and on hand of discontinued operation – 4 – –

Cash at bank and on hand of continuing operations 624 218 250 116

Cash at bank consists of temporary surplus funds which are non interest bearing.Reconciliation of CashThe above figures are reconciled to the cash at the end of the financial year as shown in the statement of cash flows as follows:Cash and cash equivalents 624 222 250 116Bank overdrafts 18 (1,001) (1,649) – –

(377) (1,427) 250 116

NOTE 9 RECEIVABLES

Trade receivables 862 18,161 – –Less: Provision for doubtful debts (145) (164) – –

717 17,997 – –Other debtors 198 3,488 56 97

915 21,485 56 97

Less Classified as assets held for saleReceivables of discontinued operations – 15,190 – –

Receivables of continuing operations 915 6,295 56 97


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2007 2006 2007 2006 $000s $000s $000s $000s

NOTE 10 INVENTORIES

On handFinished goods at cost 511 12,199 – –Provision for stock obsolescence (10) (108) – –

501 12,091 – –Work in Progress 61 418 – –Raw materials 179 2,719 – –In transit – 556 – –

741 15,784 – –Less Classified as assets held for saleInventories of discontinued operations – 10,234 – –

Inventories of continuing operations 741 5,550 – –

Refer to Note 21 for details of inventory pledged as security

NOTE 11 OTHER CURRENT ASSETS

Prepayments 362 1,012 38 154Loans receivable – secured 2,000 – – –Amounts due from subsidiaries – – 31,168 19,851

2,362 1,012 31,206 20,005Less Classified as assets held for saleOther current assets of discontinued operations – 22 – –

Other Current Assets of continuing operations 2,362 990 31,206 20,005

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NON-CURRENT ASSETS

NOTE 12 INVESTMENTS BENEFICIAL PERCENTAGE COUNTRY OF OWNED BY INCORPORATION CONSOLIDATED ENTITY PARENT ENTITY

2007 2006 2007 2006 % % $000s $000s Investments (at cost) in subsidiaries comprise:Rutuba Pty Limited Australia 100 100 – –Seven Hills Property Pty Ltd Australia 100 100 8,051 8,051 Plaspak JWS Pty Ltd Australia – 100 – –JWS Management Services Pty Ltd Australia 100 100 – –PPK Property Trust Australia 100 100 6,339 6,339Plaspak QP Pty Limited Australia – 100 – 1,500 PPK Townsville Pty Limited Australia 100 100 487 487U.S. Masters Pty. Limited Australia 100 100 – – Reckas Pty. Limited Australia 100 100 – –Plaspak Management Pty Ltd Australia – 100 – 1,702 Plaspak Steri-Plas Pty Ltd Australia – 100 – –Dandenong South Property Pty Ltd Australia 100 100 9,430 9,430PPK Aust. Pty Ltd Australia 100 100 5,497 5,497 Trigger Sprays Pty Ltd Australia 100 100 – – PPK Mistlon Pty Ltd Australia 100 100 – – PPK Investment Holdings Pty Ltd Australia 100 100 – – Spraypac Products (NZ) Limited * New Zealand – 50 – – Plaspak (P.E.T) Pty Ltd Australia – 100 – – Plaspak Contaplas Pty Limited Australia – 100 – – PPK SA Pty Ltd Australia 100 100 – – PPK Properties Pty Ltd Australia 100 100 – – Neta Brymac Pty Ltd Australia 100 100 – – PPK Vic Pty Ltd Australia 100 100 – – Plaspak Closures Pty Ltd Australia – 100 – – Plaspak Pty Ltd Australia – 100 – –Plaspak Peteron Pty Ltd Australia – 100 – 9,458Landmark Property Syndicate No 4 * Australia 100 100 – –York Group Limited Australia 100 100 12,056 12,056 York Precision Plastics Pty Ltd Australia – 100 – – York Precision Plastics NZ Ltd New Zealand – 100 – – Advanced Power Products Pty Ltd Australia 100 100 – – ACN 081 798 334 Pty Ltd Australia 100 100 – – Rambor Pty Ltd Australia 100 100 – – King Cobra Mining Equipment Pty Ltd Australia 100 100 – –

41,860 54,520

The proportion of ownership interest is equal to the proportion of voting power held.*These entities were audited by a firm other than the auditor of the Parent entity.The above investments in subsidiaries are all in ordinary class shares.


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NOTE 12 INVESTMENTS (continued)

(b) Subsidiaries with ownership interests of 50 % or lessThe consolidated entity held 50% of the shares of Spraypac Products (NZ) Limited. Under a shareholders’ agreement the consolidated entity had a casting vote at board meetings if there was a deadlock.The entity was disposed of on 1 September 2006. CONSOLIDATED ENTITY PARENT ENTITY

2007 2006 2007 2006 $000s $000s $000s $000s(c) Available for sale financial assets(i) Listed Investments – at market value– Shares in other corporationsOpening Balance – – – –Additions at cost 4,590 – – –Conversion of convertible notes (derivatives) into listed investments 1,754 – – –Fair Value adjustments 800 – – –Disposals (696) – – –

6,448 – – –

listed investments are recorded at fair value based on the ASX closing price at the 30 June of the relevant financial period.

(ii) Unlisted Investments – at cost less impairment– Shares in other corporationsOpening Balance 265 266 – –Additions at cost – 219 – –Impairment – (220) – –Transfer to secured loan receivable (16) – – –

249 265 – –

unlisted investments are recorded at cost less dimunition as fair value is not measurable.

(iii) Total Listed & Unlisted Investments 6,697 265 – –

NOTE 13 PROPERTY, PLANT AND EQUIPMENT AND INVESTMENT PROPERTIES

(a) Investment PropertiesFreehold land & buildings – at costLand 20,874 – – –

Buildings 23,111 – – –Less: Accumulated depreciation (2,729) – – –

20,382 – – –

Total Investment Properties 41,256 – – –

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Note 2007 2006 2007 2006 $000s $000s $000s $000s

NOTE 13 PROPERTY, PLANT AND EQUIPMENT AND INVESTMENT PROPERTIES (continued)

ReconciliationsBalance at the beginning of the year – – – –Transfers from other property, plant & equipment 13b 44,149 – – –Expenditure subsequent to acquisition 43 – – –Disposals (2,452) – – –Depreciation expense (484) – – –

41,256 – – –

The following amounts have been recognised in the income statement:Rental income 4,403 – – –Direct operating expenses arising from investment property that generated rental income during the period 965 – – –Direct operating expenses arising from investment property that did not generate rental income during the period 51 – – –

(b) Other property, plant & equipmentFreehold land & buildings – at costLand – 21,372 – –

Buildings – 25,252 – –Less: Accumulated depreciation – (2,753) – –

– 22,499 – –

Total Land and Buildings – 43,871 – –

Leasehold improvements – at cost 373 759 – –Less: Accumulated depreciation (72) (105) – –

301 654 – –

Plant and equipment – at cost 2,355 76,968 – –Less: Accumulated depreciation (486) (53,748) – –

1,869 23,220 – –

Capital works in progress – at cost 17 236 – –

Plant and equipment under lease – 8,914 – –Less: Accumulated amortisation – (2,408) – –

– 6,506 – –

Total other property, plant and equipment 2,187 74,487 – –


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Less Classified as assets held for saleLand – 824 – –Buildings – 1,626 – –Plant and equipment – 18,725 – –Leasehold improvements – 35 – –Plant and equipment under lease – 6,379 – –Capital works in progress – 233 – –

Property Plant & Equipment of discontinuing operations – 27,822 – –

Total other property, plant and equipment of continuing operations 2,187 46,665 – –

Total property, plant and equipment and investment properties of continuing operations 43,443 46,665 – –

A directors’ valuation of Non-Current Land & Buildings was undertaken on 30 June 2006 on properties to be leased to the new owners of the plastics packaging businesses.The Riverwood land & building was valued on acquisition at January 2005. This building is now leased by York Precision Plastics.The directors’ aggregate valuation of Land and Buildings is $56.5 million.The valuations are based on a combination of independent advice on the market valuations, formal valuations and purchase offers and comparisons to similar properties sold in the area. Capital gains tax that could be paid if the Land & Buildings were sold at balance date at this valuation is $5.7million. These valuations have not been reflected in the accounts.

Non-current assets pledged as securityRefer to Note 21(b) for information on non-current assets pledged as security by the parent entity or its subsidiaries.

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ReconciliationsReconciliations of the carrying amounts of each class of property, plant & equipment are set out below.

Freehold Leasehold Plant & Leased Plant Capital Works Land Buildings Improvements Equipment & Equipment In Progress Total Note $’000 $’000 $’000 $’000 $’000 $’000 $’000

Consolidated – 2007Carrying amount at start of year 21,372 22,499 654 23,220 6,506 236 74,487Additions – – 4 968 – – 972Disposals – – (42) (21,785) (6,257) (219) (28,303)Transfers between categories 326 (48) (278) 206 (206) – –Transfers to Investment properties 13a (21,698) (22,451) – – – – (44,149)Transfers to intangible assets 15 – – – (184) – – (184)Depreciation & Amortisation expense – – (37) (556) (43) – (636)

Carrying amount at end of year – – 301 1,869 – 17 2,187

Consolidated – 2006Carrying amount at start of year 21,079 22,733 734 23,994 7,153 1,795 77,488Additions 293 56 211 2,464 1,472 (1,559) 2,937Disposals – – (66) (533) (66) – (665)Transfers – 177 (177) 1,293 (1,293) – –Depreciation & Amortisation expense – (467) (48) (3,998) (760) – (5,273)Net transfers to current assets – – – – – – –

Carrying amount at end of year 21,372 22,499 654 23,220 6,506 236 74,487


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2007 2006 2007 2006 $000s $000s $000s $000s

NOTE 14 TAX

(a) AssetsDeferred tax assets comprise temporary differences attributable to:Amounts recognised in profit and lossFinance leasesTax losses – 1,993 – 1,993Doubtful Debts 176 49 – –Employee benefits 248 1,178 – –Building depreciation 546 724 249 212Depreciation of intangibles 84 – – –Costs of preparing plastics packaging business for sale – 291 – 291Inventory 3 29 – –Deferred rent receivable 103 – – –s40-880 Black hole expenses 81 93 – 4Other 35 82 – –

1,276 4,439 249 2,500

Less Classified as assets held for saleDeferred tax assets of discontinued operations – 1,188 – –

Deferred tax assets of continuing operations 1,276 3,251 249 2,500

There are no unrecognised capital losses for which no deferred tax asset has been recognised.

(b) LiabilitiesCURRENTIncome Tax provision of continuing operations 3,254 – 3,254 –

NON-CURRENTDeferred tax liability comprises temporary differences attributable to:Amounts recognised in profit and lossFinance leases – 461 – –Plant and equipment depreciation 55 1,174 4 –Fair value adjustment of derivatives 793 – – –Fair value adjustment of Investments 240 – – –Other 29 12 8 –

1,117 1,647 12 –

Less Classified as liabilities directly associated with assets classified as held for sale Deferred tax liability of discontinued operations – 1,562 – –

Deferred tax liability of continuing operations 1,117 85 12 –

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2007 2006 2007 2006 Note $000s $000s $000s $000s

NOTE 15 INTANGIBLE ASSETS

Licences, software and patents – at cost 497 2,146 19 –Less: Accumulated amortisation (236) (402) – –

261 1,744 19 –

Goodwill– Discontinued Plastics Packaging – 2,069 – –– Custom Plastics – 232– Mining equipment manufacturing 155 155 – –

155 2,456 – –

Brand names – at cost 497 500 – –Less: Accumulated amortisation and impairment losses – – – –

497 500 – –

913 4,700 19 –

Less Classified as assets held for saleLicences, software and patents – 120 – –Goodwill – 2,069 – –Brand names – – – –

Intangible Assets of discontinuing operations – 2,189 – –

Intangible Assets of continuing operations 913 2,511 19 –

ReconciliationsLicences, software and patents – at costBalance at the beginning of year 1,744 1,412 – –Additions – external purchases 366 442 19 –Transfers from Plant and Equipment 13(b) 184 – – –Disposals (1,948) – – –Amortisation charge (Amortisation charges are included within Cost of Goods Sold and Administration expenses in the income statement) (85) (110) – –

261 1,744 19 –

GoodwillBalance at the beginning of year 2,456 2,456 – –Disposals (2,301) – – –

155 2,456 – –

Brand NamesBalance at the beginning of year 500 1,355 – –Disposals (3) (855)

497 500 – –


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NOTE 15 INTANGIBLE ASSETS (continued)

Licences, software and patents have a finite useful life. They are recorded at cost and amortised on a straight line basis over the number of years of their expected life which ranges from 3 to 10 years.Brand names have been assessed to have an indefinite useful life. These brands are registered with the relevant agencies. The registrations are renewed at insignificant cost to the consolidated entity. This, combined with continued support for the brands by product development, advertising and marketing expenditure, has allowed the consolidated entity to determine that the assets have an indefinite useful life. They are recorded at cost and tested annually for impairment. Impairment losses are charged to the income statement.Brand names associated with Advanced Power Pty Ltd of $858,000 were sold effective 1 July 2005.Goodwill is assessed to have an indefinite life, it is tested annually for impairment with any impairment losses being charged to the income statement.

Impairment disclosuresIntangible assets deemed to have indefinite lives are allocated to the Group’s cash generating units identified according to business segment.A segment level summary of the intangible assets deemed to have indefinite lives is as follows: Brand Names Goodwill Total $’000 $’000 $’000Year ended 30 June 2007Mining Equipment Manufacturing 497 155 652

497 155 652

Year ended 30 June 2006Plastics packaging – 2,068 2,068Custom Plastics – 232 232Mining Equipment Manufacturing 497 156 653

497 2,456 2,953

The recoverable amount of intangibles in the prior year for plastics packaging cash-generating unit was determined using fair value less costs to sell. The recoverable amount at 30 June 2006 was more than supported by the offer for this business by Skyson Pty Ltd, which at 30 June 2006 had signed a contract to purchase this cash generating unit.The recoverable amount of intangibles in the custom plastics and mining equipment manufacturing cash-generating units are determined based on value-in-use calculations. Value-in-use is calculated based on the present value of 5 year discounted cash flow projections based on budgets approved by management. The growth rate used in these budgets does not exceed the long term average growth rate for the business in which cash-generating units operate.The following assumptions were used in the value-in-use calculations: 2007 2006 Growth Discount Growth Discount Rate Rate Rate Rate % % % %Mining Equipment Manufacturing 5.00 12.00 5.00 12.00Custom Plastics – – 5.00 12.00

The budgets used by management use historical weighted average growth rates to project revenue. Costs are calculated taking into account historical gross margins as well as estimated weighted average inflation rates over the period which are consistent with inflation rates applicable to the locations in which the segments operate. Discount rates are pre-tax and are adjusted to incorporate risks associated with a particular segment.

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2007 2006 2007 2006 Note $000s $000s $000s $000s

NOTE 16 OTHER NON-CURRENT ASSETS

Director Loans – secured* 32(c) 439 439 439 439Employee Loans – secured* 228 372 228 342Other Loans – secured** 4,945 – – –Other Debtors – 6 – –

5,612 817 667 781

Less Classified as assets held for saleOther Non-current assets of discontinued operations – 36 – –

Other Non current Assets of continuing operations 5,612 781 667 781

* Further information relating to loans to directors and specified executives is set out in Notes 5 and 32. These loans are secured over the shares acquired.

** These loans are secured by both property and fixed & floating charges. Repayment terms are within 1 year. Interest rates are floating and currently

average 10%.


2007 2006 2007 2006 $000s $000s $000s $000s

CURRENT LIABILITIES

NOTE 17 PAYABLES

Trade payables 907 11,881 206 17Sundry payables and accruals 257 1,260 6 23

1,164 13,141 212 40

Less Classified as liabilities directly associated with assets classified as held for salePayables of discontinued operations – 10,131 – –

Payables of continuing operations 1,164 3,010 212 40


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2007 2006 2007 2006 Note $000s $000s $000s $000s

NOTE 18 INTEREST BEARING LIABILITIES

Bank overdraft -secured 18(a) 1,001 1,649 – –Bank Loans – Secured 18(a) – 3,060 – 1,580Lease liabilities – Secured 18(a) & 27 – 1,683 – –Hire purchase liabilities – Secured 27 373 2,074 – –Other loans – unsecured – 89 – –Loans from related bodies corporate – – 16,202 9,458

1,374 8,555 16,202 11,038

Less Classified as liabilities directly associated with assets classified as held for saleLease liabilities of discontinued operations – 1,551 – –Hire purchase liabilities of discontinued operations – 1,624 – –Other loans of discontinued operations – 89 – –

Interest bearing liabilities of discontinued operations – 3,264 – –

Interest bearing liabilities of continuing operations 1,374 5,291 16,202 11,038

(a) Bank overdraft and bank loans – securedThe bank overdraft, bank loans and certain lease liabilities are secured by certain charges over the consolidated entity’s freehold properties, assets and undertakings.Each bank loan has a specific purpose with various loans having repayment schedules, which extinguish the debt over periods ranging from 7 to 10 years.Bank overdrafts have been reflected after taking account of legal right of set-off which was established with the bank and whereby interest is charged on the net balance.(b) Total secured liabilities – see Note 21

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2007 2006 2007 2006 $000s $000s $000s $000s

NOTE 19 PROVISIONS

CurrentEmployee benefits 357 1,773 – –

357 1,773 – –

Non CurrentEmployee benefits 471 2,161 – –

Total Provisions 828 3,934 – –

Less Classified as liabilities directly associated with assets classified as held for saleCurrentEmployee benefits – 1,228 – –

– 1,228 – –

Non CurrentEmployee benefits – 1,438 – –

Total provisions of discontinued operations – 2,666 – –

PROVISIONS OF CONTINUING OPERATIONSCurrentEmployee benefits 357 545 – –

Non CurrentEmployee benefits 471 723 – –

Total Provisions of continuing operations 828 1,268 – –

WarrantyBalance at the beginning of the year – 40 – –Disposals – (40)

Balance 30 June 2007 – – – –

Redundancy and plant closureBalance at the beginning of the year – 18 – –Amounts used – (18)

Balance 30 June 2007 – – – –


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2007 2006 2007 2006 Note $000s $000s $000s $000s

NOTE 20 OTHER CURRENT LIABILITIES

Deferred income 343 10 – –Less Classified as liabilities directly associated with assets classified as held for saleDeferred income on sale and leaseback of assets of discontinued operations – (10) – –

Other current liabilities of continuing operations 343 – – –

NON-CURRENT LIABILITIES

NOTE 21 INTEREST BEARING LIABILITIESBank Loans – Secured 18(a) 7,995 44,094 6,000 23,231Lease liabilities – Secured 18(a) & 27 – 3,285 – –Hire purchase liabilities -Secured 439 2,563 – –

8,434 49,942 6,000 23,231

Less Classified as liabilities directly associated with assets classified as held for saleLease liabilities of discontinued operations – 3,172 – –Hire purchase liabilities of discontinued operations – 1,769 – –

Interest bearing liabilities of discontinuing operations – 4,941 – –

Interest bearing liabilities of continuing operations 8,434 45,001 6,000 23,231

Borrowings were substantially repaid from the proceeds of the plastics packaging business sale.

(a) Secured liabilitiesTotal secured liabilities (current and non-current) are:Bank overdrafts 1,001 1,649 – –Bank loans 7,995 47,154 6,000 24,811Lease liabilities – 4,968 – –Hire purchase liabilities 812 4,637 – –

9,808 58,408 6,000 24,811

Bank overdrafts and loans are secured as noted in Note 18 above.Lease and Hire Purchase liabilities are effectively secured as the rights to those assets revert to the lessor or hirer in the event of default.

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2007 2006 2007 2006 Note $000s $000s $000s $000s

NOTE 21 INTEREST BEARING LIABILITIES (continued)

(b) Assets pledged as securityThe carrying amounts of non-current assets pledged as security are:First mortgageFreehold investment properties/land and buildings 13 41,256 43,871 – –Finance LeasePlant & equipment under finance lease 13 – 6,506 – –Floating chargeInvestments – – – –Plant & equipment 2,170 23,778 – –

Total non-current assets pledged as security 43,426 74,155 – –

The following current assets are also pledged as security under the floating charge:Cash assets 624 222 – –Receivables – current 915 21,580 – –Inventories 741 15,784 – –Other current assets 2,362 1,012 – –

Total current assets pledged as security 4,642 38,598 – –

Total assets pledged as security 48,068 112,753 – –

The total financial assets included in the above pledged as security for liabilities is $1,539,000 (2006 $21,802,000)

NOTE 22 OTHER NON-CURRENT LIABILITIES

Deferred income on sale and leaseback of assets – 6 – –

– 6 – –

Less Classified as liabilities directly associated with assets classified as held for saleDeferred income on sale and lease back of assets of discontinued operations – 6 – –

Other non-current liabilities of discontinuing operations – – – –


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2007 2006 2007 2006 $000s $000s $000s $000s

SHAREHOLDERS’ EQUITY

NOTE 23 CONTRIBUTED EQUITY

PAID-UP CAPITAL61,186,227 ordinary shares fully paid (2006 68,153,105 ordinary shares) 33,573 38,885 33,573 38,885

Movements in ordinary share capitalBalance at the beginning of the financial year 38,885 38,773 38,885 38,773Shares repurchased under approved buy back scheme (5,312) – (5,312) –Exercise of options – 112 – 112

33,573 38,885 33,573 38,885

The shares have no par value. Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held.Each ordinary share is entitled to one vote at shareholder meetings. CONSOLIDATED ENTITY PARENT ENTITY

2007 2006 2007 2006 No. No. No. No.Movements in number of ordinary sharesBalance at the beginning of the financial year 68,153,105 68,003,105 68,153,105 68,003,105Shares repurchased under approved buy back scheme (6,966,878) – (6,966,878) –Exercise of options – 150,000 – 150,000

61,186,227 68,153,105 61,186,227 68,153,105

(a) During the prior financial year the company issued 150,000 ordinary shares at an average of $0.73 each through the exercise of employee share options.(b) Information about the PPK Executive Incentive Scheme ,including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the financial year are set out in Note 36.

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2007 2006 2007 2006 $000s $000s $000s $000s

NOTE 24 RESERVES

Foreign currency translation – 24 – –Available for Sale Investments 559 – – –Share options 8 8 8 8

567 32 8 8

Movement in reservesShare optionsOpening balance 8 4 8 4Share based payments – 4 – 4

Closing balance 8 8 8 8

Available for Sale InvestmentsOpening balance – – – –Listed securities marked to market 559 – – –

Closing balance 559 – – –

Foreign currency translationOpening balance 24 57 – –Translation of 50% interest in Spraypac Products NZ Ltd and York Precision Plastics NZ Pty Ltd (24) (33) – –

Closing balance – 24 – –

The foreign currency translation reserve is used to record exchange differences on translation of foreign controlled subsidiaries. The reserve is recognised in the income statement when the investment is disposed of.

NOTE 25 MINORITY INTERESTS

Minority interest comprises:Share capital – 64 – –Reserves – – – –Retained earnings/(Accumulated losses) – 87 – –

– 151 – –

(a) Minority interests in issued and paid-up capital of subsidiariesUnits in Property Trust Landmark Property Syndicate No 4 – – – –Issued ordinary shares Spraypac Products (NZ) Limited – 64 – –

– 64 – –


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NOTE 26 FINANCIAL INSTRUMENTS & RISK MANAGEMENT OBJECTIVES AND POLICIES

(a) Forward Exchange ContractsThe consolidated entity enters into forward exchange contracts to buy and sell specified amounts of foreign currencies for the purchase of machinery and inventory, in the future, at stipulated exchange rates. The objective in entering the forward exchange contracts is to protect the consolidated entity against unfavourable exchange rate movements for both the contracted and anticipated future sales and purchase undertaken in foreign currencies.At balance date, the details of outstanding forward exchange contracts buying foreign currency and selling Australian dollars are: Average Exchange Rate 2007 2006 2007 2006Buy Currency Maturity $’000 $’000United States Dollars 0–6 months – 2,206 – 0.745Euro Dollars 0–6 months – 239 – 0.586Japanese Yen 0–6 months – 239 – 84.74

(b) Interest Rate ExposuresTo manage cashflow interest rate risk the company enters into fixed rate lease and hire purchase contacts, and when appropriate, interest rate swap contracts.The consolidated entity’s exposure to interest rate risk and the effective weighted average interest rate for each class of financial assets and financial liabilities is as follows:

Weighted Fixed Interest Rate Maturing Average Floating Non- Interest Interest Within 1 to 5 Interest Rate Rate 1 Year Years Bearing Total % Note $000s $000s $000s $000s $000s2007 Financial AssetsCash 0.0 8 – – – 624 624Loans Receivable 10.0 11 5,612 2,000 – – 7,612Receivables 0.0 9 – – – 915 915Available for sale financial assets 0.0 12(c) – – – 6,697 6,697Derivatives 0.0 37 – – – 890 890

Total Financial Assets 5,612 2,000 – 9,126 16,738

Financial LiabilitiesBank Overdrafts 10.5 18 1,001 – – – 1,001Bank Loans 7.3 21(a) 7,995 – – – 7,995Other Loans 0.0 – – – – –Trade & Other Payables 0.0 17 – – – 1,164 1,164Lease & Hire Purchase Liabilities 7.0 18 & 21 – 373 439 – 812Derivatives 0.0 37 – – – – –

Total Financial Liabilities 8,996 373 439 1,164 10,972

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NOTE 26 FINANCIAL INSTRUMENTS & RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

(b) Interest Rate Exposures (continued)

Weighted Fixed Interest Rate Maturing Average Floating Non- Interest Interest Within 1 to 5 Interest Rate Rate 1 Year Years Bearing Total % Note $000s $000s $000s $000s $000s2006 Financial AssetsCash 0.0 – – – 262 262Loans Receivable 9.8 811 – – – 811Receivables 0.0 – – – 21,709 21,709Derivatives 0.0 37 – – – 13 13

Total Financial Assets 811 – – 21,984 22,795

Financial LiabilitiesBank Overdrafts 9.6 18 1,649 – – – 1,649Bank Loans 6.9 21(a) 47,154 – – – 47,154Other Loans 0.0 – – – 89 89Trade & Other Payables 0.0 – – – 13,255 13,255Lease & Hire Purchase Liabilities 7.0 18 & 21 – 3,757 5,848 – 9,605Derivatives 0.0 37 – – – – –

Total Financial Liabilities 48,803 3,757 5,848 13,344 71,752

Bank loans of the consolidated entity currently bear variable interest rates.

(c) Credit Risk ExposureThe credit risk exposure of the consolidated entity to financial assets, which have been recognised on the balance sheet, is generally the carrying amount, net of any provisions for doubtful debts. The consolidated entity’s exposure is minimised by the fact that the majority of the trade receivables balance is with a diverse range of blue-chip Australian and Multi-national manufacturers and retailers. The balance is with a very wide range of manufacturers and resellers with no large single concentration in any area.(d) Fair values of financial assets and liabilities

On-balance sheetThe fair values of financial assets and financial liabilities approximate their carrying value.

Derivative financial instrumentsThe Fair value of financial assets or financial liabilities arising from forward exchange contracts has been determined by valuing the contracts at balance date.

(e) Liquidity riskThe Group’s objective to mitigate liquidity risk is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, finance leases and hire purchase contracts.

(f) Price RiskThe Group is exposed to commodity price risk insofar as the purchase price of the Group’s main raw material is linked to the price of oil and other chemicals and materials. This risk has proven difficult to mitigate in the past and is one of the key reasons behind the sale of the Group’s plastic manufacturing and distribution operations.


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2007 2006 2007 2006 Note $000s $000s $000s $000s

NOTE 27 LEASE COMMITMENTS

(a) Finance leases commitments payable:– not later than 1 year – 1,962 – –– later than 1 year but not later than 5 years – 3,550 – –– later than 5 years – – – –

Minimum lease payments – 5,512 – –Less:Future finance charges not provided in the financial statements – (544) – –

Total lease liability – 4,968 – –

Provided in the financial statements as:Current liabilities 18(a) – 1,683 – –Non-current liabilities 21 – 3,285 – –

– 4,968 – –

(b) Hire Purchase commitments payable:– not later than 1 year 405 2,332 – –– later than 1 year but not later than 5 years 454 2,734 – –– later than 5 years – – – –

859 5,066 – –Minimum hire purchase paymentsLess:Future finance charges not provided in the financial statements (47) (429) – –

812 4,637 – –

Total hire purchase liabilityProvided in the financial statements as:Current liabilities 373 2,074 – –Non-current liabilities 439 2,563 – –

812 4,637 – –

(c) Operating lease commitmentsOperating lease rentals contracted for but not capitalised in the financial statements payable:– not later than 1 year 275 1,031 – –– later than 1 year but not later than 5 years 127 937 – –– later than 5 years – – – –

402 1,968 – –

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2007 2006 2007 2006 $000s $000s $000s $000s

NOTE 28 CAPITAL EXPENDITURE COMMITMENTS

Capital expenditure commitments contracted for:Plant and equipment purchases – 128 – –Payable– not later than 1 year – 128 – –

NOTE 29 SUPERANNUATION COMMITMENTS

Contributions are made to by the consolidated entity to employee defined contribution superannuation funds.All funds were accumulation plans whereby the company contributed various percentages of employee gross incomes, the majority of which were as determined by the superannuation guarantee legislation. Benefits provided under the plan are based on accumulated contributions and earnings for each employee. There is no legally enforceable obligation on entities in the consolidated entity to contribute to the superannuation plans other than requirements under the superannuation guarantee legislation. CONSOLIDATED ENTITY PARENT ENTITY

2007 2006 2007 2006 $000s $000s $000s $000s

NOTE 30 CONTINGENT LIABILITIES

(a) Parent entityGuarantees of subsidiaries’ banking and finance facilities totalling $48,700,000 of which $9,603,000 was drawn at balance date.Bank guarantees over borrowings by purchasers of PPK’s former thermoforming business in Adelaide 250 250 250 250

(b) SubsidiariesBank guarantees 350 355 – –


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NOTE 31 SEGMENT INFORMATION

(a) Year ended 30 June 2007 CONTINUING OPERATIONS DISCONTINUING OPERATIONS

Mining Total of Total of Property Equipment Continuing Plastics Custom Generator Importing & Discontinuing & Investing Manufacturing Operations Packaging Plastics Operations Distribution Operations Eliminations Total $000s $000s $000s $000s $000s $000s $000s $000s $000s $000sBusiness SegmentsPrimary SegmentSales Revenue – 2,837 2,837 13,269 18,006 – – 31,275 – 34,112

Rental income 4,403 4,403 – – 4,403

Other Revenue 3,119 9 3,128 85 13 – – 98 – 3,226

Total Revenue 7,522 2,846 10,368 13,354 18,019 – – 31,373 – 41,741

Segment result 5,910 189 6,099 11,229 (568) – – 10,661 – 16,760

Unallocated interest – – –

Consolidated operating profit before income tax 6,099 10,661 16,760

Income tax (expense)/benefit (1,478) (5,159) (6,637)

Consolidated operating profit after income tax 4,621 5,502 10,123

Minority interest – (12) (12)

Net profit after tax attributable to members 4,621 5,490 10,111

AssetsSegment Assets 58,810 4,663 63,473 – – – – 63,473

Unallocated Assets – – –

63,473 – 63,473

LiabilitiesSegment Liabilities (note e) 15,340 1,174 16,514 – – – – 16,514

Unallocated Liabilities – – –

16,514 – 16,514

Other segment informationDepreciation 533 250 783 363 363 1,146

Amortisation of Leased assets 1 – 1 42 42 43

Amortisation of other intangibles 14 – 14 – – 14

Acquisition of non-current Segment assets – – –

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NOTE 31 SEGMENT INFORMATION

(a) Year ended 30 June 2007 CONTINUING OPERATIONS DISCONTINUING OPERATIONS


Rental income 4,403 4,403 – – 4,403

Other Revenue 3,119 9 3,128 85 13 – – 98 – 3,226

Total Revenue 7,522 2,846 10,368 13,354 18,019 – – 31,373 – 41,741

Segment result 5,910 189 6,099 11,229 (568) – – 10,661 – 16,760

Unallocated interest – – –


Income tax (expense)/benefit (1,478) (5,159) (6,637)

Consolidated operating profit after income tax 4,621 5,502 10,123

Minority interest – (12) (12)

Net profit after tax attributable to members 4,621 5,490 10,111

AssetsSegment Assets 58,810 4,663 63,473 – – – – 63,473


63,473 – 63,473

LiabilitiesSegment Liabilities (note e) 15,340 1,174 16,514 – – – – 16,514


16,514 – 16,514

Other segment informationDepreciation 533 250 783 363 363 1,146

Amortisation of Leased assets 1 – 1 42 42 43

Amortisation of other intangibles 14 – 14 – – 14



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NOTE 31 SEGMENT INFORMATION (continued)

(b) Year ended 30 June 2006 CONTINUING OPERATIONS DISCONTINUING OPERATIONS


Rent from Plastics Packaging 2,108 2,108 – (2,108) –

Other Revenue 441 1 442 325 7 170 3 505 – 947

Total Revenue 2,549 3,017 5,566 76,652 19,072 170 3 95,897 (2,108) 99,355

Segment result 1,929 403 2,332 5,277 645 170 (107) 5,985 (2,108) 6,209

Rent paid to Property (2,108) 2,108 –

Unallocated interest (429) (2,801) (3,230)


Income tax (expense)/benefit 1,546 (233) 1,313

Consolidated operating profit after income tax 3,449 843 4,292

Assets

Segment Assets 46,016 4,366 50,382 57,142 16,157 – 12 73,311 123,693


50,382 73,311 123,693

Liabilities

Segment Liabilities (note e) 50,736 1,208 51,944 22,546 2,711 – 154 25,411 77,355


51,944 25,411 77,355

Other segment information

Depreciation 525 81 606 3,552 355 – – 3,907 4,513

Amortisation of Leased assets – 6 6 599 155 – – 754 760

Amortisation of other intangibles 20 – 20 53 – – – 53 73

Impairment of unlisted investment 220 – 220 – – – – – 220


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(b) Year ended 30 June 2006 CONTINUING OPERATIONS DISCONTINUING OPERATIONS


Rent from Plastics Packaging 2,108 2,108 – (2,108) –

Other Revenue 441 1 442 325 7 170 3 505 – 947

Total Revenue 2,549 3,017 5,566 76,652 19,072 170 3 95,897 (2,108) 99,355

Segment result 1,929 403 2,332 5,277 645 170 (107) 5,985 (2,108) 6,209

Rent paid to Property (2,108) 2,108 –

Unallocated interest (429) (2,801) (3,230)


Income tax (expense)/benefit 1,546 (233) 1,313

Consolidated operating profit after income tax 3,449 843 4,292

Assets

Segment Assets 46,016 4,366 50,382 57,142 16,157 – 12 73,311 123,693


50,382 73,311 123,693

Liabilities

Segment Liabilities (note e) 50,736 1,208 51,944 22,546 2,711 – 154 25,411 77,355


51,944 25,411 77,355

Other segment information

Depreciation 525 81 606 3,552 355 – – 3,907 4,513

Amortisation of Leased assets – 6 6 599 155 – – 754 760

Amortisation of other intangibles 20 – 20 53 – – – 53 73

Impairment of unlisted investment 220 – 220 – – – – – 220



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(c) the consolidated entity operates wholly within Australia and new Zealand. new Zealand is not a material additional geographic segment.

(d) the consolidated entity had the following six business segments

the plastics packaging segment primarily manufactured bottles and closures and imports and distributes trigger sprays. this business segment was sold on 1 September 2006 and has been shown as a discontinued operation.

the property & investment segment which owns the properties from which the plastics packaging and custom plastics segments carried out its manufacturing operations. these properties were retained and leased at commercial rents to the purchasers of those businesses. this segment also owns primarily listed and some unlisted investments from which it earns income and capital growth.

the Custom plastics segment manufactured extruded acrylic and imported and distributed cast acrylic for lighting and industrial applications. this business segment was sold effective 31 May 2007 and has been shown as discontinued operation.

the Generator operations segment imports, assembled and maintains power generating equipment. this segment was sold effective 30 June 2005 and has been included as a discontinuing operation.

the Mining equipment segment manufactures portable underground mining equipment.

the importing and distribution segment imports and sold wire and hardware products. this segment was sold 3 June 2005 and has been included as a discontinuing operation.

the last four segments were all acquired on purchase of York Group limited and subsidiaries in January 2005.

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(e) Following the sale of the plastics packaging segment on 1 September 2006 the entity repaid $43 million of bank debt included in the property segment liabilities.

(f) Segment information is prepared in conformity with the accounting policies described in note 1.

Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment and the relevant portion that can be allocated to the segment on a reasonable basis. Segment assets include all assets used by a segment and consist primarily of operating cash, receivables, inventories, property, plant and equipment and goodwill and other intangible assets. While most of these assets can be directly attributed to individual segments, the carrying amounts of certain assets used jointly by segments are allocated based on reasonable estimates of usage. Segment liabilities consist primarily of trade and other creditors, employee benefits and provisions for service warranties. Segment assets and liabilities do not include income taxes.

(g) Inter-segment rent

Inter-segment rent represents actual rent charged by continuing operations to discontinued operations. the basis for charging such rent during the year was not consistent with market rentals going forward. Some rents were at market rates, some were at non-market rates and in some cases rent was not charged at all. In future periods, continuing operations will charge market rentals to the businesses currently classified as discontinued operations.

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NOTE 32 RELATED PARTIES

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.Transactions are inclusive of GST.Transactions with related parties: CONSOLIDATED ENTITY PARENT ENTITY

2007 2006 2007 2006 $000s $000s $000s $000s(a) Subsidiaries:(i) Supply of caps, bottles and triggers between subsidiaries for plastics manufacturing and resale. These items eliminate on consolidation.(ii) Rental of premises – wholly-owned subsidiaries. These items eliminate on consolidation.(iii) Provision of interest free unsecured loans– current receivables (wholly-owned subsidiaries) – – 24,722 19,851– current payables (wholly-owned subsidiaries) – – 9,756 9,458(iv) Dividends received or receivable from wholly-owned subsidiaries – – – 24,275Trust Distribution from controlled trust – – – –(v) Management fees paid to the Directors of Spraypac Products (NZ) Limited. – 98 – –(vi) Provision of interest free unsecured loans by the Directors of Spraypac Products (NZ) Limited (included in current payables) – 98 – –

(b) Director-related entities(i) Success fee re sale of Advanced Power Pty Ltd payable to Corso Management – 110 – – Payable outstanding at balance date – – – –(ii) Provision of accounting services by Holden and Bolster, a firm in which Mr R. Beath is a partner 257 378 177 208Payable outstanding at balance date 53 226 6 162(iii) Provision of legal services by Doherty Partners, a firm in which Mr J. Wowk was a partner 494 928 369 619Payable outstanding at balance date – 531 – 474(iv) Provision of legal services by HWL, a firm in which Mr J. Wowk is a partner 244 – 110 –Payable outstanding at balance date 129 – 32 –The aggregate amounts receivable and payable to director-related entities at balance date were as follows:– current assets– current liabilities 182 757 38 636


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NOTE 32 RELATED PARTIES (continued)

(c) Loans to key management personnelRefer to Note 5(h) for details of loans to key management personnel

(d) Share transactions of directors:Directors and director-related entities have acquired or disposed of ordinary shares in the Parent entity during the financial year as follows: CONSOLIDATED ENTITY PARENT ENTITY

2007 2006 2007 2006 No. No. No. No.PPK Group Limited – acquired 792 6,614 792 6,614PPK Group Limited – disposed (198) (6,234) (198) (6,234)

Net movement 594 380 594 380

Directors and director-related entities hold directly, indirectlyor beneficially as at the reporting date the following equityinterests in members of the consolidated entity:PPK Group Limited – ordinary shares 10,034 9,440 10,034 9,440

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2007 2006 2007 2006 $000s $000s $000s $000s

NOTE 33 CASH FLOW INFORMATION

(a) Reconciliation of profit after income tax to the cash provided by operating activitiesProfit after income tax 10,111 4,292 14,791 6,308Cash flows in operating result attributable to non-operating activities:Interest paid 1,503 4,077 784 1,542Cash flows in operating activities but not attributable to operating result:Payments from employee provisions (558) (1,389) – –Non-cash flows in operating profit:Amortisation 128 870 – –Depreciation 1,077 4,513 – –Deferred income (2) (29) – –Deferred expenses 4 24 – –Recognition of income from rent free periods deferred on acquisition (843) – – –Fair value adjustments on derivatives (2,644) – – –Transfers to provisions 1,488 1,964 – –Intercompany loans forgiven – – (15,946) 18,370(Profits) on sale of subsidiaries (10,725) – (6,786) –(Profits) on sale of property, plant & equipment (1,309) (149) – –Increase/(decrease) in tax payable 3,254 (82) 3,254 (379)decrease/(increase) in deferred tax assets 2,452 (2,535) 2,251 (2,270)Increase/(decrease) in deferred tax liabilities 756 402 12 (1)Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries:Decrease in trade and other debtors 627 1,552 – –Decrease/(increase) in prepayments 382 25 157 (32)(Increase)/decrease in inventories (173) (222) – –(Decrease)/increase in trade – – – –Creditors and accruals (2,203) (1,389) 172 95

Net cash provided by operating activities 3,325 11,924 (1,311) 23,633

(b) Reconciliation of CashFor the purposes of the cash flow statement, cash includes:Cash on hand 6 14 – –Call deposits with financial institutions 618 248 250 116Bank overdrafts – secured (1,001) (1,649) – –

(377) (1,387) 250 116


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NOTE 33 CASH FLOW INFORMATION (continued)

(c) Disposal of EntitiesDuring the year the plastics packaging and custom plastics Subsidiaries were sold.During the prior year the Subsidiary Advanced Power Pty Ltd was sold, with $2.4 million deferred settlement proceeds received in the 2007 financial year. 2007 2006 $000s $000sAggregate details of this transaction are:Disposal Price 53,969 3,197

Cash consideration 50,833 663(Cash)/Overdraft held at disposal date (67) 134Vendor finance 6,780 –Rent free periods deferred (1,177) –Deferred consideration (2,400) 2,400

53,969 3,197

Assets and liabilities held at disposal date:Receivables 17,230 2,269Prepayments 268 176Inventories 15,421 2,854Property, Plant & Equipment 28,102 461Deferred tax assets 711 166Intangibles 4,245 858Creditors (9,880) (3,244)Interest Bearing Liabilities (7,702) (252)Deferred Tax liabilities (1,526) –Other liabilities (5) –Provisions (3,469) (261)Minority interest (151) –

43,244 3,027Net gain on disposal 10,725 170

53,969 3,197

(e) Non-cash Financing and Investing Activities(i) During the financial year, the consolidated entity had an upward fair value adjustment on derivatives of $2,644,000. These related to options held in listed company investments.

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2007 2006 2007 2006 $000s $000s $000s $000s

NOTE 33 CASH FLOW INFORMATION (continued)

(f) Unused credit facilities(i) The consolidated entity had access to the following lines of credit at balance date:Total facilities availableBank Overdraft 3,000 4,500 – –Bank Loans 37,700 48,745 – –

40,700 53,245 – –

Not utilised at balance dateBank Overdraft 1,999 2,851 – –Bank Loans 29,700 1,533 – –

31,699 4,384 – –

Utilised at balance dateBank Overdraft 1,001 1,649 – –Bank Loans 8,000 47,212 – –

9,001 48,861 – –

The major facilities are summarised as follows:Banking overdraftsBank overdraft facilities are arranged with the ANZ Bank and the National Australia Bank with the general terms and conditions being set from time to time. Overdraft balances are subject to set-off arrangements whereby credit balances can be netted off against debit balances with the total facility and interest being applied to the net balance.Commercial bill facilities$53,245,000 variable interest rate facilities provided by the Commonwealth Bank of Australia Ltd, ANZ Bank, Suncorp Metway and the National Australia Bank Ltd.All banking facilities are subject to annual review in line with normal banking practice. There is no reason to believe that facilities will not be routinely renewed at this point. Interest rates on facilities range from 6.05% to 7.18% inclusive of bank margins.

NOTE 34 EVENTS SUBSEQUENT TO REPORTING DATE

No matters or circumstances have arisen since the end of the period which significantly affected the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in the financial year subsequent to 30 June 2007.


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NOTE 35 DISCONTINUING OPERATIONS

On 28 June 2006 a conditional contract was signed for the sale of the plastic packaging business. The effective date of the sale was 1 September 2006.The consideration for the sale was $50 million less lease liabilities taken over by Plaspak Holdings Ltd (the purchaser). The sale was announced subject to shareholder approval at a meeting held on 16 August 2006 and receiving the appropriate regulatory approval. The consideration represents a price that is a surplus over the book value of the assets being sold of about $10 million. Additional payments of up to $5 million were paid to the Company for the provision of consultancy services assessed by the achievement of agreed performance criteria during the 2007 financial year following completion of the sale.On the 29 June 2007 the sale of the custom plastics division (York Precision Plastics) was settled with effect from 31 May 2007.Sale price was $9.25m and equates approximately to the net asset value. Of this price $6.8 million was funded via vendor finance.On 14 September 2005 a contract for the sale of Advanced Power Pty Ltd for $3.5 million was entered into. This company formed the whole of the Generator Operations segment of the Consolidated Entity. The effective date of the sale was 1 July 2005. This operation only formed part of the consolidated entity for 5 months of the 2005 financial year.Financial information relating to the discontinued operation is set out below and in the Segment Reporting Note 31.The financial performance of the discontinued operations for the financial year which is included in the income statement for the year is as follows: CONSOLIDATED ENTITY PARENT ENTITY

2007 2006 2007 2006 $000s $000s $000s $000s

Revenue from ordinary activities 31,275 95,392 – –Cost of sales (22,426) (69,665) – –Rental expense paid to continuing operations – (2,108) – –

Gross profit 8,849 23,619 – –

Interest Received – 5 – –Profit/(Loss) on sale of assets 10,729 146 6,185 –Foreign exchange (losses)/gains (1) (83) – –Other revenues from ordinary activities 98 354 – –Warehouse & Distribution expenses (2,675) (7,633) – –Selling Expenses (2,029) (3,356) – –Administrative expenses (2,953) (8,364) – (970)Finance costs (1,357) (3,612) (784) –

Profit from discontinuing operations before income tax 10,661 1,076 5,401 (970)Income tax expense (5,159) (233) (6,499) 291

Profit from discontinuing operations after income tax 5,502 843 (1,098) (679)

Profit attributable to minority interest (12) – – –Net profit after income tax attributable to members of the parent entity 5,490 843 (1,098) (679)

The net cash flows of the discontinuing operations which have been incorporated into the statement of cash flows are as follows:Net cash inflow (outflow) from operating activities 1,864 11,326 – –Net cash inflow (outflow) from investing activities (335) 278 (970) –Net cash inflow (outflow) from financing activities (1,521) (11,316) (784) –

Net cash increase in cash generated by discontinuing operations 8 288 (1,754) –

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NOTE 35 DISCONTINUING OPERATIONS (continued)

The asset and liability details of items disclosed as held for sale in the balance sheet would otherwise have been classified as the following types of assets and liabilities: CONSOLIDATED ENTITY PARENT ENTITY

2007 2006 2007 2006 $000s $000s $000s $000s

Current assetsCash and cash equivalents – 44 – –Trade and other receivables – 15,414 – –Inventories – 10,439 – –Other – 21 – –Derivatives – 1 – –

Total current assets – 25,919 – –

Non-current assetsFinancial assets – – – –Property, plant and equipment – 27,822 – –Deferred tax assets – 1,188 – –Intangible assets – 2,189 – –Other – 36 – –

Total non-current assets – 31,235 – –

Total assets held for sale – 57,154 – –

Current liabilitiesTrade and other payables – 10,245 – –Interest Bearing Liabilities – 3,264 – –Current tax liabilities – – – –Provisions – 1,228 – –Derivatives – 6 – –Other – 10 – –

Total current liabilities – 14,753 – –

Non-current liabilitiesInterest Bearing Liabilities – 4,941 – –Deferred tax liabilities – 1,562 – –Provisions – 1,438 – –Other – 6 – –

Total non-current liabilities – 7,947 – –

Total liabilities directly associated with assets held for sale – 22,700 – –

Net assets – 34,454 – –


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NOTE 36 SHARE BASED PAYMENTS

Director and Employee Share Option Arrangements(i) PPK eligible executive employees may be granted options under the PPK Executive Incentive Scheme. Options granted under the scheme are for a maximum of 5 years. Options under the scheme may only be exercised after 2 years from the date of issue and expire 30 days after the employee ceases to be an employee.(ii) Options that were granted to directors required shareholder approval and vested immediately.(iii) At the Annual General Meeting on 25 November 2003, shareholders approved the grant of 200,000 options to the Managing Director Mr David Hoff, which he became entitled to under his management contract. These had an exercise price of $1.40 and could have been exercised at any time up until 31 May 2007. He became entitled to these on 31 May 2003.(iv) Options hold no voting or dividend rights and are not transferable without Board of Directors approval.The closing price of an ordinary share of PPK Group Limited on the Australian Stock Exchange at 30 June 2007 was $0.78 (30 June 2006 $0.75).

CONSOLIDATED Weighted Ave CONSOLIDATED Weighted Ave PARENT PARENT ENTITY Exercise Price ENTITY Exercise Price ENTITY ENTITY

2007 2007 2006 2006 2007 2006 No. $ No. $ No. No.(a) Movement in the number of share options held by Directors are as follows:Opening Balance 1,100,000 $1.60 1,200,000 $1.63 1,100,000 1,200,000Granted during the year – – – – – –Exercised during the year – – – – – –Lapsed during the year (200,000) $1.40 (100,000) $1.86 (200,000) (100,000)

Closing Balance 900,000 $1.65 1,100,000 $1.60 900,000 1,100,000

Weighted average exercise prices are the same for the parent entity as for the consolidated entity.The remaining 900,000 options expired on 12 August 2007.

CONSOLIDATED Weighted Ave CONSOLIDATED Weighted Ave PARENT PARENT ENTITY Exercise Price ENTITY Exercise Price ENTITY ENTITY

2007 2007 2006 2006 2007 2006 No. $ No. $ No. No.(b) Movement in the number of share options held by employees are as follows:Opening Balance 375,000 $1.07 575,000 $0.85 375,000 575,000Granted during the year – – – – – –Exercised during the year – – (150,000) $0.65 – (150,000)Lapsed during the year (375,000) $1.07 (50,000) $0.90 (375,000) (50,000)Closing Balance – $0.00 375,000 $1.07 – 375,000

Weighted average exercise prices are the same for the parent entity as for the consolidated entity.Weighted average remaining life of these options is 3 months.All outstanding options were exercisable. However given they are out of the money it was unlikely that they would be exercised at the balance date price.

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2007 2006 2007 2006 $000s $000s $000s $000s

NOTE 36 SHARE BASED PAYMENTS (continued)

(c) Details of share options exercised during the year:Proceeds from shares issued – 110 – 110Fair value as at issue date of shares issued during the year – 128 – 128

The company assists employees to acquire shares through exercise of options by providing loans to employees at commercial interest rates. Shares issued to employees in this manner serve as security for the debt.


2007 2006 2007 2006 $000s $000s $000s $000s

NOTE 37 DERIVATIVES

Current assetsInterest rate swap contracts – – – –Forward foreign exchange contracts – 14 – –

– 14 – –Less Classified as assets held for saleForward foreign exchange contracts of discontinued operations – 1 – –

Forward foreign exchange contracts of continuing operations – 13 – –

Non-current assetsOptions in listed companies 890 – – –

Options 2,875,000 options in Industrea Limited with an exercise price of 15 cents. Options expiry date is 28 September 2009 and can be exercised any time up until then.

Current LiabilitiesForward foreign exchange contracts – 6 – –

– 6 – –Less Classified as liabilities directly associated withassets classified as held for saleForward foreign exchange contracts of discontinued operations – 6 – –

Forward foreign exchange contracts of continuing operations – – – –

Derivative Instruments used by the GroupThe Group has elected not to hedge account. As a result the value of foreign currency liabilities is taken up at the spot rate at balance date and the value of all derivatives is taken up as a hedge asset or liability. Gains and losses resulting to fair value are taken to the income statement.

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Directors’ Declarationfor the year ended 30 June 2007 PPK Group Limited and Subsidiaries

the directors declare that the:

1. accompanying financial statements and notes:

(a) comply with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

(b) give a true and fair view of the:

i. financial position of the company and consolidated entity as at 30 June 2007; and

ii. performance of the company and consolidated entity for the financial year ended on that date.

2. Board has been given the declarations by the chief executive officer and chief financial officer required by section 2�5A of the Corporations Act 2001.

In the opinion of the directors:

1. the financial statements and notes are in accordance with the Corporations Act 2001; and

2. there are reasonable grounds to believe that the company will be able to meet its debts as and when they become due and payable.

Signed in accordance with a resolution of the board of directors.

Colin Francis RyanDirector

Sydney, 24th September 2007

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Independent Audit Report

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Independent Audit Report

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Auditor’s Independence Declaration

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Additional Information for Listed Public Companies

1. SHAREHOLDING(a) Distribution of shareholders at 21 August 2007Category (size of holding) Number of Number of Shareholders Shareholders 2007 2006 000s 000s

1 – 1,000 146 1741,001 – 5,000 516 5935,001 – 10,000 459 54910,001 – 100,000 564 631100,001 and over 56 54

1,741 2,001

(b) The number of shareholdings held in less than marketable parcels is 48.

(c) The names of the substantial shareholders listed in the holding company’s register at 21 August 2007

Number Number of shares of shares 2007 2006ANZ Nominees 8,644 8,699Corso Investments Pty Ltd 8,544 7,996Equipment Co of Australia Pty Ltd 6,618 6,619Applied Colour Pty Limited 2,200 3,940John E Gill Operations 1,078 1,078National Nominees Limited – 4,272

(d) Voting rightsThe consolidated entity has one class of ordinary shares with equal voting rights attached to them.

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(e) Twenty largest shareholders Number of Percentage held ordinary fully paid of listed shares held ordinary capital Name 000s %

1 ANZ Nominees Limited 8,664 14.12 2 Corso Management Pty Ltd 8,544 13.92 3 Equipment Co of Australia Pty Ltd 6,618 10.78 4 Applied Colour Pty Limited 2,200 3.58 5 John E Gill Operations 1,078 1.73 6 Metal Industries Pty Ltd 1,059 1.73 7 Citicorp Nominees Pty Limited 880 1.43 8 Mr David Hoff 857 1.40 9 MF Custodians Ltd 662 1.0810 Mr Colin Francis Ryan & Mrs Jose Maureen Ryan 500 0.8211 John E Gill Operations Pty Ltd 491 0.8012 Mr Robert Joseph Faulks & Mrs Patricia Baynton Faulks 440 0.7213 Ian Macdonald 425 0.6914 HSBC Custody Nominees 416 0.6815 Ms Alison Irving 342 0.5616 Flagstaff Superannuation Ltd 311 0.5117 Charles Peter Taylor 300 0.4918 Chandos Nursing Home Pty Ltd 290 0.4719 Poets Pty Ltd 257 0.4220 Mrs Patricia Baynton Faulks 255 0.42

34,589 56.32

(f) There is an on market buy back for Group shares which will end on or before 21 November 2007.

2. THE NAME OF THE COMPANY SECRETARY ISMr Robert Nicholls

3. THE ADDRESS OF THE PRINCIPAL REGISTERED OFFICE IN AUSTRALIA IS25–27 Waratah Street, Kirrawee, NSW 2232Telephone (02) 9521 8444Fax (02) 9521 4561Email [email protected]

4. REGISTERS OF SECURITIES ARE HELD AT THE FOLLOWING ADDRESSES:New South WalesRegistries LimitedLevel 228 Margaret Street, Sydney NSW 2000P.O. Box P67, Royal Exchange, Sydney NSW 1223

5. STOCK EXCHANGE LISTINGQuotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian Stock Exchange Ltd.

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Notes

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Notes

NOTIcE Of ANNUAL GENERAL MEETING

the 2007 Annual General Meeting of ppK Group limited will be held at:

3:00pm on Wednesday, 14 november 2007 at the Grace Hotel, 77 York Street, Sydney.

the business of the meeting is outlined in the notice of Meeting and proxy Form.

ASX look-up code: PPK

Website: www.ppkgroup.com.au

Share Registry: www.registries.com.au

ppK Group limited ABN 65 003 964 181

cONTENTs

Chairman and Managing Directors’ review 1

Review of operations 4

Board of Directors and Company Secretary 6

Five year financial summary 8

Corporate Governance Statement 9

Directors’ report 19

Financial statements 28

Corporate directory Inside back cover

FINANCIAL HIGHLIGHTS 2007 ($000)

profit from Continuing operations Before Income tax 6,099 220.5%

profit Before Income tax 16,760 462.6%

profit After tax Attributable to Members 10,111 135.6%

earnings per Share 15.9 cents 152.4%

Corporate Directory

DIREcTORs

colin f. Ryan B.Com., Dip.ed., C.A Director and Chairman (non-executive)

Glenn R. Molloy Director (executive)

Raymond M. Beath B.Com., F.C.A Director (non-executive)

Jury I. Wowk B.A., ll.B Director (non-executive)

David A. Hoff C.p.A Managing Director

cOMPANY sEcRETARY

Robert J. Nicholls MBA (Distinction), ll.B (Hons) Grad Dip leg prac., Grad Dip CSp, FCIS

HEAD OffIcE & REGIsTERED OffIcE ppK Group limited 25-27 Waratah Street Kirrawee nSW 2232 telephone 02 9521 8444 Facsimile 02 9521 4561 www.ppkgroup.com.au

sHARE REGIsTRY Registries limited level 2, 28 Margaret Street Sydney nSW 2000 telephone 02 9290 9600 Facsimile 02 9279 0664 www.registries.com.au

AUDITORs

BDO Kendalls Allianz Centre 2 Market Street Sydney nSW 2000 telephone 02 9286 5555 Facsimile 02 9286 5599

PPK GROUP PROPERTIEs

New south Wales



13A Station Road Seven Hills nSW 2147

25-27 Waratah Street Kirrawee nSW 2232

16 Wiggs Road Riverwood nSW 2210

Victoria

36-42 Hydrive Close Remington Industrial estate Dandenong South VIC 3175

Queensland

72 pritchard Road Virginia QlD 4014

PPK Group Businesses

New south Wales Rambor pty limited 108 Albatross Road South nowra nSW 2541 telephone 02 4422 6323 Facsimile 02 4422 5423 www.rambor.com.au

DESIGN: COLLIER & ASSOCIATES THE STRATEGIC DESIGN COMPANY #12275

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PPK GROUP LIMITED 07